We are excited to announce the launch of a new podcast last call. While many market wrap shows can cover the same ground, we wanted to try something different. We wanted to get away from what the market did in the past month and instead bring in some of our friends who offer truly unique perspectives and data. And we wanted to have some fun along the way. In our latest episode, we talked to Ben Hunt about the narrative battle between markets and politics in AI, Ahan Mennan, about what's going on in the economy and Brent Kachuba, about the flows in the market behind the scenes. You can subscribe to last call on all major podcast platforms using the links in this episode description. Thank you for listening. We hope you enjoy the show. This is one of the most challenging backdrops because you have to deal with an inflation shock. Is there going to be demand destruction or, you know, is this transformative technology just going to override everything that's classical macro? From a market perspective, we have never, and this is one of the things we visualize. We've never been more bullish about the AI build out. Never, but in politics, when we look at the political narratives, the storyline around data center build out, the role of AI in our society. And those negative stories, those negative narratives, they are spiking a whole bunch of these names in the NASDAQ that are at their peak implied vault. So most expensive options ever and they're piled into calls. So what is this? This is stocks literally crashing higher. You're watching excess returns. The channel that makes complex investing ideas simple enough to actually use or better questions lead to better decisions. This is last call, a different kind of market rap. Jack forehand, I raised my tumbler of vodka. I don't know what I'm drinking in here today. I raise this in your direction. Are you are you ready to market rap? If that is vodka, you have actually, if you actually take that down during the episode, we are, yeah, we are, we are, if it's the fireworks here by about 45 or 50 minutes. I mean, I think we're in for fireworks, no matter what we've got some killer guests lined up. Do you want to run down the people that we're talking to this month? Yeah, we brought a Hanvanan is on who's great. He was a really systematic approach to looking at macro and we talked about what's going on with the economy, inflation, a lot of different things. You've got a great interview with Ben Hunt on World War A.I., which is, we'll leave that open so people can hear later what it's about. And then we've also got Brent Kachub as usual talking about flows behind the scenes. So we've got a really good episode. This is a really great way to check in with some of our favorite people on stuff that happened in the last month, recent history, and then map this all forward. I love this because it kind of gives a good excuse to start to think about conversations that I know we're all having in our lives in the next weeks and months ahead. So this is a good crash course behind some of the best thinkers on what they're watching right now. So I'm excited to dive into all these. I think the thing we have to talk about when we look at the last month is this idea that on one hand we've kind of got, well, a lot of people are viewing fundamentals and events and valuations on one side. And then what the market's actually doing on a different side and people are having a hard time connecting those two things and seeing how they relate to each other. And we've got a war going on right now. The market keeps getting more and more and more expensive. People are sort of questioning many things around that. Well, as our resident straight of Hormuz expert, where can you point at the straight of Hormuz trade data showing up in the current stock market valuation in price? We forgot to do we were going to do the picture of you in the boat. We were going to the backdrop to have you be in the boat for the. We forgot to do we forgot to do that. I mean, we know Satri and he actually sent someone in a boat to the straight of Hormuz to get some information, but we were going to do a fake Matt Madzigler trip to the straight of Hormuz. Maybe next month, I can report live from the boat when the straight of Hormuz situation still isn't resolved. Should that be the case? What's interesting to me like about this is there's two kind of things. One is the market's ability to see maybe what it thinks is going to happen in the future. And that's happened so many times in my career where we're sitting at some event where we're like, all right, the market should be down. Something should be happening. And the market kind of sees through that and there's a major change going in the background, which five years later, we realize, oh, that was a major change going on the background. And I kind of feel that way about like the straight of Hormuz and AI right now. Like I feel like the market, especially when Mito's came out, you started seeing big changes and earnings estimates across many of these like tech type companies. Just particularly the 70 companies. The market's seeing a very big future right now. And that might be a legitimate fundamental reason for it to be kind of ignoring the here and now to some degree. I believe there's an actual exhaustion element of all this to the AI stuff is so overwhelming. So everywhere that it's exhausting. So we just the natural tendencies to make certain assumptions for this is big. This is immovable and this is here. Same thing with straight of Hormuz. It's so confusing and so none of this makes any sense that we're exhausted by it and therefore somehow suppressing all of this as if it doesn't matter. There's no case on either of these that we don't look back and either say, and it can go in either directions. It could either be, we were way more worried about the straight of Hormuz than we ever should have been and look how great everything turned out or holy crap what a disaster this turned into and same thing with AI this changed every single business is some material way we completely underestimate it or we completely overestimated it and after that space X IPO everything just went off a cliff. Clashed and burned years and years of political chaos. This part of these are such big giant stories that we almost don't know how to think of them so we'll just ignore them. I mean there's a lot of therapy in the world over this topic. Talk about exhaustion like that we have a deal we don't have a deal like this person's involved this person's not involved with the I mean this has been going on for months we've had a deal or we've not had a deal. I mean maybe maybe some sort of tactic like some sort of exhaustion tactic where people just like stop throw their hands up like stop paying attention to it because I mean it seems like maybe we're getting close to having a deal now but like two knows that time this comes out maybe there's no deal are you saying there's an art or is this more of a science of a deal Jack. Yeah. And like I could even tell you what's in the deal by the way but it's just there's been so many things floating about what's in the deal that was not in the deal it's like who even knows like I don't even know as a market how I can even interpret that because God only knows what's in the deal with the deal or if there even will be a deal. God only knows how much I love you sir and let's not forget behind that Beach Boys reference that this idea that earnings and expectations they all keep going up like our year of year estimates were getting like the quarterly earnings reports everything that's coming in still suggest everybody looking beyond both of these things to some version of a fairly optimistic future where there's a lot of growth in so far markets seem to be more or less keeping pace with these rising expectations that are digesting and ignoring some of these major major issues that again they feel like the dominant headlines of the day but they barely register when we look at the deal. these expectations for even 6 or 12 months down the road. >> I mean, that was one of the biggest takeaway from our Adam Parker episode this week, which was by the way, I'd recommend everyone go watch it was a great episode. But this idea, he was able to track like the change in earnings estimates to exactly what's going on in the market. Like the market is up by the change in earnings estimates this year. The sectors that are up the most are up by the change in earnings estimates. The ones that are down or down by the change in earnings estimates. So like whether those estimates are right or wrong is a different question. But like if you're thinking like the market's not tracking fundamentals, the market's tracking the fundamentals like at least that the analysts believe are going to happen. And the other point I would make is with AI, we don't know like Adam made this point that we might be trading on 2030, 2031 fundamentals. And there is a version of the world. And again, you and I are like there were the people that are out there looking at this risk for the street of our moves and seeing what's going on and saying like this could go the wrong way. But there's a version of the world where there's 2030 and 31 fundamentals are phenomenal because of AI. Like there's a version of that world where we look back and we're like, wow, that you know, what was the street of four moves like why do I even care about that? I'm not saying that's necessarily the base case, but that version of the world exists because we're in the middle of a completely transformative technology where no one has any idea what the real impact is going to be five years. So reformed AI bull Jack is still with us. I don't know like Jack Jack has been very much a like world of probabilities type of guy. I need some more of the the. The. I think we're. I'm just trying to accept the reality because as you know whenever we put anything positive out in the podcast like we're just getting destroyed in comments these days. So like I feel like we're in a very close-minded world about different alternatives and I feel like Jack needs to be person who looks at probabilities like there is this very bad probability out here, but there's also this really good probability and there's a bunch of stuff in the middle and like all of us that are trying to predict which ones going to come come to play like is we're not we just don't know. You got to think about it in terms of a distribution and I agree you have to think about it like that because if you remove or change any of these things, the the. The mean on whatever your distribution of these expectations are like that mean can shift. If the straight and four moves get solved tomorrow and the AI stuff keeps proliferating in a certain way, that mean might actually move a lot in your range of potential outcomes. Conversely, there's the other scenario to where the straight and four moves all of a sudden we realize that it is a bad thing and markets decide it's a bad thing and a bunch of the other forward expectations come back in. In that case, the whole meaning of your expected possible values here can shift. This is probably we've had several guests say this to us. One of the most confusing times in global markets that a lot of these people have ever experienced. I know it certainly feels that way for me. Yeah, and if those types of people are admitting they don't know the answer, then we don't know the answer either. And also the idea that in Bob Elliott, I think has talked about this like to some degree, the street of where we've done some degree of damage to the economy here, even if it opens tomorrow. So like what is that? We don't really know that that's if we talked about the positive side, a lot of the negative side would be obviously the negative would be if it doesn't open, but also like, will prices being this high has certainly probably had some impact on the global economy less on the US probably than some other.
countries, but what that impact is, we don't know. And that's what we've got to figure out going forward. Yeah, all we know is that somebody paid for and used oil, gas, crude, et cetera, somewhere in the world during this thing. I know I didn't that. It was a lot the other day. Listen, about to purchase a hybrid car and feeling very, very good about that trade in, you know, seeing what the Miles Per Galan is on that thing given the current situation. So I understand it. There are ramifications of this. They're not all rosy and we still don't know what they are. And that's part of what's going to be the game of 2026. So maybe it's a good time to bring in an actual macro expert, Matt, instead of us, what do you think? I mean, an actual, yes, this is definitely the time I'm going back to my vodka. Please introduce our first guest. So our first guest is a Han Benan founder of Femithius macro. As I mentioned before, like a great systematic macro firm. So here's my conversation with the Han. Han, welcome to last call. Hey, thanks for having me on, Jack. Good to see you. I was excited to talk to you because I would say, and I don't know, you could tell me as someone like inside the macro community, like this seems to be one of the more challenging macro backdrops. Like it a long time. Like on one hand, we've got wars and oil shocks. And then the other hand, we've got this massive, transformative technology with AI that people are looking, I guess the market is looking through the future. So is this like a more challenging time for macro, then, normal? Yeah, yeah, it's definitely, you know, I think the challenging is almost an understatement, especially if you're, you know, macro or, you know, macro equity oriented. This is like one of the most challenging backdrops because you have to deal with an inflation shock. Is there going to be demand destruction? Or, you know, is this transformative technology just going to override everything that's classical macro? So it's definitely a lot, a lot to take in as an investor today. And even some variables like, do we care control? Like when is the street of form who's going to open? Like I mean, obviously you've got a lot of people predicting that who probably qualified to predict that, but it's like, that's another variable that we none of us know. I've yet to find the qualified person from predicting that. Yeah. I was talking to Matt at the beginning of the episode. This idea that like, I mean, it's like, we've got a settlement. Then we don't have a settlement. We've got a deal. There's no deal. Like it's, it's just been going on for months now. It's just, it's a very hard thing. You almost have to, it's like a systematic macro person. You always have to put that aside, right? And say like, I can't do anything about that. Let's just look at what the economy is actually telling me. Yeah. And I, I, I, we, you know, we found that that, so that type of approach kind of look through the noise and just focus on what the, so you know, just a backstory before you get into this particular thing. But basically what we do is we create systematic strategies across macro assets, take into account the nuances of individual macro assets, right? So even within macro, there are all kinds of different styles of investor you can do. And so you can create fair value strategies. So you can create, you know, assets on a relative value basis. You can trade, you know, just price-based trends. There's a whole ensemble of different macro strategies you can do. And so we have a variety of those different strategies we track. And the single most successful set of strategies this year have basically been the strategies that have, in some ways kind of, you know, there's that meme on, on, on, on X, where you have the, the, the bell curve and the two, you know, there's the, there's the right, the right end of the bell curve and the left end of the bell curve. They both say the same thing. And the mid-cove is making it too complicated. The, the, the most straightforward approach has really been to look at what the economy is doing and allocate in line with what the economy is doing, rather than getting too cute about the pricing and looking forward too much. And so basic macro trend following has really, really done well and kind of been able to navigate this by kind of avoiding all of the noise that, you know, we're seeing in markets from all this geopolitical, yeah, all this, all this geopolitical craziness, it'll like me better to. So getting into what the economy is doing, you've got your macro monitor here, your growth now cast. So what is this telling you? Yeah, so we took a slightly alternative style approach. So there are, there are many different ways to come up with, with, you know, what, where we are in terms of the growth cycle. And typically, what you basically have is like we, you know, you, you get more precise on the exact GDP number as your now cost gets slower in frequency. But what we wanted to do is, you know, we wanted to have something that's very fast and timely. And so we use some, you know, non-traditional income based approaches to estimate where nominal GDP is on a daily basis. And so, you know, it's not exactly to the trend, you know, it won't be pin-point, on the point of where nominal GDP is at. But it generally, as you can see from the visualization, the, the red line is official nominal GDP and the blue line is our daily now cost. So we generally tend to get the big muscle movements of which where GDP is going, pretty decently using this measure. And nominal GDP is, is running very, very hard. It's running very, very hard. And, you know, that's also consistent with kind of the, the more precise kind of monthly versions that I alluded to earlier. And what you really seeing over there is you'll see in a situation where the consumer continues to spend. AI CapEx continues to just have the more, the largest contribution it's had to GDP growth in its in history. And the rest of the economy, the more cyclical parts of the economy have been meandering, but not enough to stop those two seconds. And so the, the combination of those basically gets you to a nominal GDP environment, which is really, really strong. Would you expected like one of the things people would expect maybe is with this oil shock to see like some sort of demand destruction across other things, because people are going to still fill up their cars like you haven't seen any signs of that yet though, right? We haven't seen any signs of that just yet. And I think that, um, I think that one of the things that you really have to think about as an investor is that that, that, that, that, that, that, that logical sequence of demand destruction is totally right. But the, the timescale that it plays out on is very different from what is intuitively satisfying. And so, you know, when you think about demand destruction, the, how it starts with the energy prices, right? It starts with the energy and commodity prices. And then it slowly makes its way into the economy. Like the, the energy prices don't all get reflected immediately. You see, you know, you see higher prices, pump and whatnot, but even that transition, you know, happens over the course of a month. And so, um, consumers don't react, you know, how this past is market participants react. And so like I think a lot of people expected the demand destruction to just happen in the next, you know, three prints of, you know, take your data series. But I think that the, the, the, the past to demand destruction is a much slower one. And you'll first have to see the measured inflation just stay high for a longer period. And then as people say, you know, come to terms with the fact that, hey, these prices are really high. And I have to keep rebalancing my, you know, my, my consumption basket to pay for these really, really high priced items. You slowly begin to have that process of demand destruction. And so I think that the demand destruction makes sense. But I think it's, it's something that takes a lot longer than people are really expecting right now. So on this idea of higher inflation, we've got your inflation now cast here as well. And that's somewhere we have started to see some movement unlike, unlike in growth, right? Yeah. The inflation now cast. So, you know, we, virtually every, you know, every, every fund and every sales artist situation runs some sort of inflation now, constant. Honestly, like headline inflation for the most part is dominated by, by the energy components. But I think it's particularly important to monitor the changes in that now, cost today. Because of what's happening with the, with oil prices. And so almost all the variation today is going to come from the marginal change in oil prices. And I think the important thing to recognize is that as those oil prices stay high, you know, we're looking at crude it about just under 90 bucks a barrel today. And as those energy, energy prices stay high, that, that headline CPI begins to translate into high or cost CPI over time. And so what we have right now is we have some of the hardest, you know, inflation trends that we've seen since, you know, the pandemic period. And, you know, prior to that, we haven't seen this type of inflation since, you know, the early 2000s. And so we're basically an inflation environment, which is really, really challenging both for the consumer and for the fact. And so we've been, we've definitely been keeping really, really close track of this, this particular venture, both in terms of tracking the economy and also in terms of, oh, it's impact from markets. So this is really interesting. And this next slide gets to this four quadrant thing you see a lot, which is what we're talking about, which regime we're in, but then you're kind of taking a step, a step forward in talking about like what works in that regime, right? Yeah. So what we do is we take a whole lot of fundamental macro data, so data that goes into the inflation now cut, it goes into our growth now cost and a variety of other factors. And what we try to do is something that I found to be relatively unique, but then again, every founder finds the world just as unique. So what we try to do is we try to create across asset macro market regime forecast. So every day what we're doing it, we're basically saying, hey, like, what is the macro market regime going to be tomorrow? And we do that by creating signals on a barma basis for a variety of different asset classes. And so that macro market, that macro market regime forecast is basically allows us to create a range of expectations for asset classes on a very short term basis. But the good feature about it is that as you can
can see on the visual in front of you on the regimes tend to be pretty stable over time as well, whether really big map for trying to go away. So right now what we're seeing from those macro regime probabilities is that there's a very, very high likelihood that has been a very high likelihood that we're in a rising growth environment. That rising growth environment has had a bias towards rising inflation as well. And so in that type of backdrop, you typically tend to expect a mix of pro growth assets which are stocks and commodities to our perform our anti growth assets, which are basically for the most part treasuries, both nominal and inflation links that are done. How do we think about the sort of the lasting nature inflation? Like if the street of war was opens up tomorrow, like do we still expect we're going to be have inflation with us for a while? I think I think you have to. And I think the very, very simple one line also is unless all prices tank, you're going to have the long lasting inflation because we're still looking at, you know, I might box the actual number but oil prices are up like 70% 60% per se. And so when you're looking at that price pressure, that price pressure has increased the price level. And then importantly, that might not continue to flow to headline CTI in terms of the energy components. But what happens is it starts to make its way up the supply chain. And so you'll have a whole bunch of related goods start to, you know, industrial prices begin to rise, motor vehicle prices begin to rise. And that begins to seep its way. And so, you know, possibly even wages rising because, you know, people will demand higher wages. So I think that barring, you know, a complete reversal of the power ball, all price move that we have this year, you're going to basically have a situation where we're going to have inflation at a higher clip than what we've been used to for the last couple years. So this last slide is, it gets into energy and energy is obviously what's driving everything or has been right now. And you've got an energy monitor here taking a look at behind the scenes with positioning. So can you talk about what this is and what it means? Yeah, yeah. So what we did was we wanted to basically understand like when is a good time to own energy beta, right? And I think that when you think about owning energy, it's very different from owning say an equity or a fixed income product. Like there are pretty consistent, the queries and fixed income have positive carry and positive drift over time. Own them and buy and lose on any given month or any given quarter. You're going to see those assets are less true for tries to use lately, but you know, over time, that's generally what you see when it comes to commodities, you don't always have that. And why that is is because like the risk premium tends to be more time there. And I think a big part of that risk premium really comes from the fact that hedges tend to be countercyclical pressures in the market. So what happens is you have a very large, you know, very large move in oil prices due to some sort of fundamental change like we have today. And as a result, hedges tend to come into lock in those prices, depressing prices relative to their value. And that's what creates the premium which you, which allows you to own energy or allows you to own any given commodity, which is being, you know, where there's a very large hedging pressure. So what we've done is we've gone, we've gone out and we've created a measure that allows us to quantify whether we are in a hedging dominant environment or we in a speculative dominant environment. And the idea being that the most risk premium is going to be available when hedges are the marginal driver of prices. And so on the left hand side, you can see that, you know, we have this, we have this positioning measure which basically helps us classify these periods, which is relatively good at explaining prices. And then based on the classification, we can create two conditional P and L profiles. One where hedges are the dominant dominant force in markets and then one with speculators are. And what we find is that most of the risk premium positive for owning energy commodities comes when hedges hedges are the dominant force in markets. And that is the environment that we are in today. Well, huh, thank you for coming on. You always have unique charts. Like every time you come on, you've always got ways to look at the data that I haven't seen anybody else doing. If people want to follow you and your charts in Prometheus macro, where can I go? Um, if you, if you'd like to follow us on X, we have the official Prometheus account. So that's at Prometheus macro. I'm personally on X. Uh, it's a, it's a less serious account, but it's very nonetheless. I talked about a lot of macro stuff. So that's on Prometheus. Uh, if you're interested in our very service, you can go to Prometheus. That's macro.com and you can find a whole lot of stuff. Well, thank you, Anne. I appreciate you coming on. Thanks so much, Jack. Good to see you. So our next resident expert is Dr. Ben Hunt himself, Perseant, Epsilon Theory. You know the name. We're talking about this narrative shift. We're talking about this look through. We're talking about his World War AI thesis, which is basically, at some point, the look through on this straight of four moves and how we're thinking about AI, the political issues and pushback about if people want these data centers in their backyards. That's going to come to a head at some point. Listen to Ben break down the narrative. What's going on now and what he thinks is going to happen later. Next up, we've got Ben Hunt, Epsilon Theory Perseant, Ben. Welcome to Excessor Terrence. Great to be back here, Matt. Man, I'm feeling good. I just need a haircut. I'm looking myself here in the camera. It's like, man, you got an idea of haircut. You're looking good. You're looking good. Well, if you want to go to the barber together, we can do our new birth. That's right. Yeah. I'm not going to talk about you needing a haircut. No, no, no, no. That ship is sailed. Get a haircut. Yeah, that's a real job. Exactly. We enjoy storytelling. I'll take that all over the bank. The numbers are staggering for what this is going to require. How does that play out against all of the other uses for energy and capital and land and everything else we wanted to with those primary resources? One other thing, the AI use of this, the data center uses, it doesn't come accompanied with jobs, which has been the accompanying amount of every other enormous productivity advance. Some jobs are in trouble because we're increasing productivity, but it's going to create whole new sets of jobs. Well, you think that's happening with AI? I sure don't. So it's both similar to enormous resource mobilizations we've had in the past, but also different because there's not a lot of human jobs associated with it. So this was a note written about that. And I said, look, the only way to square this circle is to treat the AI build out as if we're fighting a war because the resource mobilization is a similar sort of resource mobilization as we had for World War II. I mean, it's that big of a deal. Now, I'm not particularly in favor of that. I'm not in favor of that at all, but the point of the note was, that's what's coming because if you don't mobilize resources to that sort of degree, then you can't do it. You can't build out the AI infrastructure like our markets are shouting at us must happen because if you don't do it, if there's no productivity revolution, if there's no AI capex story to move our economy forward. Whoa!
you know, look out below when it comes to the market and look out below when it comes to our economy. So that was, that was the point of the note. Now what happened most recently, two things. First in markets, the AI CapEx story, the corporate earnings story has been the single pillar that has propelled the US stock market, all global stock markets higher. And that earnings part of the story, oh, earnings are great and they were, the earnings are great in two places. They're great in tech and everyone who supplies that AI CapEx edifice and energy. That's it. I mean, that's where the earnings are and that's where the story is. And so from a market's perspective, we have never, and this is one of the things we visualize, we've never been more bullish about the AI build out. Never. And it's not because the bulled up stories are at their loudest, is that the bearish stories are at their quietest. I'll say that again, it's not just that the bulled up stories are loud, is that the bearish stories, they are silent, they're dead. That's in markets. But in politics, when we look at the political narratives, the storyline around data center buildouts, the role of AI in our society. And those negative stories, those negative narratives, they are spiking. They are absolutely spiking. So this is what I was writing about. You've got a market that requires the AI story to succeed. And for the build out to go, go, go. And you've got a political story, this increasingly saying, we ain't behind this, right? You get the the kids booing at the graduations, you get all these protests, you get legislation that's coming down the pike. This is a narrative battle for the ages. And my view is it's absolutely going to dominate our world. Once we get through whatever the hell it is, we're going through with Iran. End or approaching midterm elections. Yeah, actual thing on the calendar. Perfect way to put it, Matt. So, so, you know, I like to say, narratives get cashed out in politics. And that politics always trumps, no pun intended. I really don't mean it as a pun. Politics always trumps economics and markets always. So, we've got, we've got, you know, this car that's going 90 miles an hour at a tight turn for the midterm elections. It's going to be an even tighter turn in 28. It's going to be an even tighter turn. This is where this is where narratives collide and this is what has enormous impact for both their political system and our, in our, our markets right now. Walk us through a couple of things you're seeing over on Percy and Pro. I want to talk about what does it mean when you say the opposition to AI infrastructure led all 37 signatures in weekly movement. Why is that such a profound indicator and we'll get that chart up here too? Well, right there, the opposition narrative. So, we track a lot of them. And what we're able to do is we call it resolution. So, it's not just, oh, there's a story that AI data centers are bad. We'd say AI data centers are bad because X, oh, they use too much water. They use too much land. Oh, they making our electricity bills go up. And all of these, all of these have a different cadence. All of these stories have a different cadence. All these stories have a different sourcing a different life cycle. Honestly. And what's striking in the same way it's so striking about the bearish stories about AI catbacks going quiet. What's notable about these political narratives is regardless of their focus, they're all going up. They're all going up. And so, it's when you see this sort of broad-based rally, you know, in these negative stories about AI data centers, that's worth looking at. Now, when you dig into it, you can absolutely see, and we see this a ton with political narratives, is that there is a push behind the narratives, often coming from outside of the US, because we live in this media environment where it's never been easier to spread the infection if you want to think of it that way. Because the math is the math of virality and spread. So, we're absolutely seeing that. It's absolutely part of a larger strategic competition, geopolitical competition. It's absolutely something that the protagonist on the corporate side want to address, shape, get ahead of. I mean, when you've got both Anthropic and OpenAI going out with, call it close to trillion dollar valuations, the story makes a ton of difference. It is that real 180 degree, one end of the spectrum for the other end of the spectrum divergent. On the political narratives here, and the market narratives that is really, really striking. On the political side, the data centers are good for us. Those stories are quiet as a mouse. On the market side, we need to be a little bearish on the AI cat-x. Will it urn out? Is it overbuilding? Those narratives are really quiet. I've never seen anything like it. Other one that I want to hit before I let you go. This just shocked me when I saw this in the polling data the other about two weeks ago now. It was this idea that five and ten Americans don't want to live next to the nuclear power plant. But seven in ten don't want to live next to the data center. I don't think people who are immersed in markets are thinking about this and hearing all the demand story and hearing all that understand just how much of a difference it is that we've now moved that your average American when pulled would rather live next to a nuclear power plant, which only 50/50 shot of, than the AI data center, which now 70% Americans are opposed to. This comes home to roost unpack that reality. It comes home to roost in politics because while 70% of US consumers don't matter for markets, because whatever percentage of our consumer spending is driven by the top, whatever 30% of consumers in terms of income. A solid K-shaped economy. That we are. All of the bottom slice of the K doesn't matter for markets. They all vote. Matters a lot for politics. That's what it mean by it gets cashed out in politics. This is going to be a very vigorously debated or and it cuts across party too. That's the other thing about it. It's perfect for a political entrepreneur on either side. Which can be impactful, let's just say, on political terms and that translates into markets. Ben, people want to follow this. They want to bug you on the internet. Where should we send them? Well, I'm Epsilon Theory everywhere. You can find me on social media and Epsilon Theory. You can look up Epsilon Theory on the web. It'll take you to our publishing arm, which is Panoptica. Sign up there. Get on the DL. We'll show you what we're working on. Come check out these charts and more. Ben, thanks for joining us. Thank you, Matt. So it's always good to wrap up with what people are actually doing. We've talked a lot about what's going on and how people should be doing or maybe things like that. What I love about talking to Brent Kachue, is Brent sees what people are actually doing. If they're buying a bunch of put options, Brent sees it. So here's Brent talking about the flows that are driving the market behind the scenes. What do you see? So, Brent, I feel like I'm kind of a broken record because every time we've been talking, I've been like, "I'm enjoying this with this cake. Go on, much longer. Can it Brent?"
Every time we think the market can't go higher, the run can't go longer, it just keeps going. - Yeah, and not only does it keep going, the number of stocks which just seem to surprise, like Dell was today and it's up 30% today, and it's like what's going on? I had an interesting observation because you talk about these AI stocks now, it's pretty good on Fit2 and people like, "No, you don't understand, Brent, these valuations are still cheap actually." Like, my crown's still trading for 10 times a year. But it was the same analyst who a year ago, when my crown was at $9 or $100, they didn't say anything to my knowledge, and now the stock's up 800%, and now you're gonna tell me how it's fairly valid. Like, I don't know, I'm confused. I'll put that with. - Yeah, it's a function of the, these are very cyclical companies typically and will be priced accordingly as a cyclical company, but if people decide the world has changed, and the AI demand is never gonna be as insatiable or something and it's not a cyclical company, then maybe they're gonna justify some higher valuations, I guess. Well, the names keep getting mispronounced as well. You know, it's like, if you see all the semisatz below earnings out, then you don't see like the pricing into these earnings events change that much to reflect the possibility of higher outcomes either. So it's a very confusing time. And the other reason that it's confusing, Jack, is we're gonna allude to, I think here in these next few minutes, is options prices are getting bananas. And so, historically, this is sort of a topping signal, and we're getting into that extreme froth, I think is we're gonna touch on here. So I'm trying to weigh these two things out. The biblical change in the AI infrastructure trade, whatever that may be, and Brent's call options indicator saying, watch out. And that's why I like to talk to you, because you're seeing, we talked about this earlier in the episode, we've talked about macro and some other things, but you're seeing what's actually going on, you're seeing what people are actually doing. And like earlier in this run, you weren't seeing this crazy coal buying necessarily, but in previous episodes of the FX effect we've done, but you're starting to see that build up, obviously. Yes, and so as so often happens, price action reinforces narrative, right? So you feel better about the AI prospects, and better about what's happening there, if the stocks are going up 20 or 30% at a clip. And the issue with that is that, a lot of these options flow is short dated, and now I'm starting to see signs of volatility traders stepping in, 'cause the implied vols got so crazy in some of these names. So the price action can be driven by stuff that has nothing to do with fundamentals, I think a lot of times. So I think when people start to conflate those things a little bit, it gets interesting, but ultimately to me, what this is about is rate of change, and the rate of change in this stuff has gotten to be, I think silly is the word that I'm going to use. It is funny though, like when the market's running up a lot, people will be like, "Claude Beethos will change the world in every way possible," and then like, as soon as it goes back down, it's gonna be like, "What is Claude Beethos?" Like I couldn't burn it that way. Yeah. It is funny, like the story does kind of follow whatever's going on with the price. Yeah, and you look at software stocks, for example, and the Citrini bottom, as it's referred to now, when he put out that article that made worldwide financial paper headlines in the software stocks, and it was just, it was such a great moment to drop that paper by him because it was peak fear, and you drop that article or that paper saying, "Yes, the software stocks are dead." Well, those things are ripping right now. Service now is a 15% today, for example, and they're all coming back, right? Because maybe AI isn't gonna eat their lunch. So it's a very tough and challenging place to navigate, but I do think again, the idea that people are using price action as their kind of fundamental indicator is challenging when a lot of those flows are short dated and levered option streets. And talking about price action, as we look forward, you've made, you've got a chart here that says, "Show's this, we've got a lot of events coming up." The could influence that price action. Yeah, that's exactly right. And so, you know, here, as we stand right now, if the day is May 29th, obviously, we're up on the day, Trump is having a meeting in the situation room, which will determine our fate, I suppose, for today. But we're looking like we're gonna get seven days. And Jack, the other reason that I thought this was interesting is, "Numorna gives me a chance to use my pen tool, which I always like to do now, as you know." BoRat's six days, but look at this right here. Record streak, nine days is the longest ever. We've had two of those. And the other one, look at that date, not too long ago, right? So, you know, we're kind of fresh off of a big winning streak and seems like today is gonna be seven days. So, we're starting to get into the longest streak of wins ever, which is, we're gonna get at least maybe one negative day. But you were just talking about the number of catalysts coming up. And so, this is interesting to me because the options market is like screaming, you know, like overbought. And you look at the number of signals coming up here. You got CPI in the tent, you got SpaceX, I believe is on the 12th still. Then you got FOMC in Worsh's first FOMC, and then you got VIXX expiration on the 17th, that's Wednesday. Then Thursday is gonna be a, what is likely to be the biggest options there are expiration ever. And then that's the Juneteenth Friday holiday. So, all of that is coming up in about 10 days, about not next week, but the week after. And so, if you're looking for a catalyst to sort of shift flows a little bit, obviously that's a screaming flag, you know, OPEX in May, for example, look what happened there, right? We had OPEX and we just had this consolidation, right? And that's what it was and then we can keep on the way. And so, at a minimum, it's like, this is that opportunity for the, a little correction or some consolidation coming up in here. I just think the correction may catch a few people off sides as these things can sometimes get violent as call prices just get a little bit overheated. - Is there anything interesting, like in the options market, like with SpaceX, do you think about, like, you know, obviously in the stock market, with what the indexes are gonna have to do and what active managers are gonna have to do and the force buying and all this stuff is, like people are talking about it all the time. Like, is there anything interesting? I mean, obviously this is gonna be probably a very widely traded, these options are gonna be widely traded once they come out, but is there anything like ahead of it you think about? - Well, we have stock up, volup, right? That's the current situation of some charts to show up on. What does that mean? As the stocks go up, the implied volup, the options are going up. Historically, it doesn't work that way. Historically, it works, you know, stocks tank and vol goes up. You know, S&P drops of VIX spikes, right? That's the same thing. But instead, will we have our stocks are crashing higher? Now, the big major indices have all changed their constitutions to allow for the SpaceX IPO to be added. And I believe the Russell says five days after the IPO, they can start adding to their indices. I think the NASDAQ is two weeks if I recall that correctly, and I'm not sure the DSB has changed yet, but I believe they will. So what does that mean? They're gonna cram SpaceX into their indices as fast as they can. And so where do you get the funding jack for buying SpaceX? Like, well, you gotta sell the other stocks, right? And so when you look at the names that have to get sold, it's obviously the Mag 7s. But who's a Mag 7 now? I mean, quite a Mag 7, but our major friend, Micron, which is just, you know, trading at options premiums that are hard to sort of appreciate, unless you're an options nerd like me. You know, that name's gonna maybe have to get sold a little bit, right, to buy some. Now, there's differences in terms of how much dollars I have to get sold, but at a minimum, you would think, okay, this is a moment for pause. Well, something is crashing up. Can it just simply pause and chill? Like, I'm not so sure. I think there could have to be a good correction. But again, I know what I'm gonna hear out of this. We could have a 30% correction in Micron, and it's just back to where it was last week, right? So like, what's that matter? I was actually just thinking about this. We're gonna need a new Mag 7 thing, right? Because SpaceX has to be included now. So we're gonna need like a whole new term. And I haven't heard anybody talking about it, but they're gonna have to come up with something. They'll come up with some Q little acronym, or you could call it a matter out. - I don't know, yeah, I'm very mad. - There are some of these other ones too that have run up. Like, have to go into next. I don't even know. Like, we made it to be the something 10. At least other stocks keep going up. - Well, the door's open for you to come up with something clever. So, I think it's a huge trick of mine. - I could be a hero here, Brent, if I come up with the, but they're very senior. - But in terms of the call buying, it's sort of widely known. Like, we should be getting a, some sort of royalty fee from the Seabow. For how often we talk about Coral and M, as an interesting indicator, I see it popping up all over more now. But generally when it goes below eight, you and I in our Opex videos talk about, okay, like that's the bat signal that things are getting wild. And there's just been so many crazy circumstances of markets having a violent downside spasm, I like to call them, because this is basically telling us that call prices and single stocks have just gotten over their skis and we need a correction. And so if you look back at the forward returns over time on this, they are negative. And so that's the kind of the big signal we're watching here. This is reminding me a little bit of July 2024, Jack. When Nvidia was the micron of the moment and it was just going up, it was up 180% from Jan 2004 to July 2024. And this is back when Jensen was signing ladies shirts and stuff like that. You remember those famous moments? And into July, we had a 10% stock market correction, correction, I don't know if you remember that. And so the reason I bring that up is I know we're supposed to keep these things short, but you know me, I keep talking. But I want to show you this job, because this was the craziest moment in July of 2024. This was the lowest core one M reading we ever got. So that said that the call prices relative to the, so the call prices relative to the index, the SPX index prices had been sort of more stretched than they've ever been in history, or at least as far as this indicator was telling us. And so when you go and you say, well, what did the S&P 500 look like at that moment, Brent? You know, it is just a speed bump in the realm of buying things, but here is that correction, right? July of 2024. Interestingly, that's OpEx that started this, but we dropped 10% from here down to August of 2024. Do you remember Jack? What happened on Monday, August, 2024? I tell you,
- No, no. This was the most famous Vicks bike that has ever spiked. - Oh, that's right. - I remember that, yeah. - Printed over 50 and then the vol options people on Twitter was like, no, that's not real. Didn't print there. It was a function of the fact that spreads were $50 wide. That's a suggestion of less risk. - Right. - But correlation freaking out before that to all time lows to me was the upside energy that energy doesn't die, right? It just goes, trains muting or whatever. It goes the other direction. And then you get this insane Vicks bike which was the low of the market. So these are the kinds of things that, you know, my seat I put together and I'm like, well, maybe we're not quite that crazy yet, but we're starting to kind of sniff that crazy, I think, when you look at some of these metrics and then you see those kind of risk moments coming up ahead. - And we go one more chart. I wanted to do a quick here before we wrap up, which is this IV rank versus Q rank. So can you explain what both those are and what we're seeing here? - Yeah, and we talk about this a lot in the Opex videos. So what this is is IV rank and it's 0 to 100 and this is all of our data since 2024. And this is for the S&P 500 stocks, so the top 25 stocks on the left, NASDAQ is on the right. Okay, what about the Y-axis? Call IV versus put IV is what we call the Q rank. So if it's a put heavy price, we're down here and if it's a call heavy price is, excuse me, if calls are rich relative to puts we're at the top of that chart, right? Does that make sense? - Yes. - If you're gonna have the most extreme call prices ever, you would be up here because that means the IV is rich so the options are expensive and everybody's piled into calls. If you're gonna have a situation where we were crashing, we would be down here. That would be put prices are really elevated and then the implied vol is really elevated. So it's like tariff tantrum, I ran war when back when that was the thing that we all cared about, that would be shown up down there. So what I did is I said, okay, for the top 25 stocks every day since 2024 plot them on this matrix and so that's what you see here on this matrix and you can see there's a general relationship, right? It kind of looks like historically or kind of like this arc. And so usually when we're in areas where call prices are kind of elevated, the overall IV is not that high, right? Because we're not, there's not a panic. It's like people feel good about the market but they're not expecting like insane movement higher. And so the two features of this map that I wanna talk about right now is look at where the concentration is in these top 25 stocks. Nearly every single stock except for one, two, three, four, five of the top 25 are at 92, 100 skewer rank, right? That means calls are richer now than they've been in 90% of previous instances for the top 25 names in the S&P 500 and it's even a little bit more extreme in the Nasdaq, right? So everybody just wants calls, no one cares about puts. The other thing that is really wild about this Jack is that look at this concentration of all these names in the Nasdaq in terms of high IV rank. So you have a whole bunch of these names in the Nasdaq that are at their peak implied vaults the most expensive options ever and they're piled into calls. So what is this? AMD, micron, PANDW, Clack, Texan, all these kinds of names, right? They're literally priced for crashes to the upside. And so this is when I talk about the extreme call prices, you know, you can't get much more extreme than this and this relates to the fact that that core one M that we saw is like below eight now. And it relates to the fact now that I'm like, look, the triggers now set, we're gonna have a spasm in my view at some point. We just need a catalyst. It could be a bad tweet. It could be a someone doesn't want to use their AI tokens anymore. It could be an iraian war situation. All of those are kind of on the table with the next two weeks, along with SpaceX, CPIs, FOMCs, a whole bunch of things here in the next kind of like 10 days, right? So my reaction here is I want to start legging into piecing into, you know, put options or, you know, downside type trades for like August, September type explorations. - Well, Brent, thank you for coming back on. This is really great. So good to see what's going on behind the scenes. I know before we go, you have a quick thing you want to mention. I think you have a course related to options, poker, right? - Yeah, thank you so much for that opportunity. So we have an event called Trade Like The House that's gonna be on June 9th, 10th, 11th. If you go to spotgammon.com/house, you can sign up for that. We are looking at options dealer flows, but also we're going to be sort of looking at trading methodologies and structuring your trade book and how you trade through the lens of poker. My business partner Matt actually is a ranked poker player who's playing the World Series of Poker right now. So he's going to be doing a lot of that work showing us how you can apply sort of the poker, ideal or lens again, two trading. And so we're really excited to present that. Again, that's going to be June 9th, 10th and 11th. So I'll come up here very soon. - I've got the worst poker fees in the book friends. So I should probably go take the course. (laughing) - Well, thank you again for coming on. - Thanks Jack. - So Matt, we're taking a look back at a lot of things. Now it's time to take a look forward. So here's the forward view. I think when we look forward, I think we have to talk about a SpaceX IPO, right? I mean, that's, it's gonna happen before our next episode. Everybody is talking about it. Everybody's indexes are falling over themselves to like get into this thing. Like there's gotta be, I don't think anybody knows what it's gonna be, but there's gotta be, there's gonna be some significant impacts to the market both in terms of SpaceX, but also the company's surrounding SpaceX, like, I don't know what your take is, but this is just really interesting to think what all of the things this is gonna meet. - This is a big, big boy of an IPO. And I think lots and lots of client conversations, lots and lots of manager conversations about how you're thinking about this, how you're dealing with it, because we've got the new rules. This thing is coming to an index fund near you. So it's like, we're gonna see flows come in for this thing beyond just the IPO. We're about to have months of SpaceX induced chaos inside of Fort Folio's managers. If you're, if your own shares privately, if you're a manager who own shares, you're looking at that S1, you're looking at this schedule of potential periods where you can unload shares and you're doing the math and the calculations on what metrics need to happen. This is, I'm not gonna call it a mess, but there's a lot of details here that make this, one of the most confusing ones ever. Are you feeling the same weight of the historic IPO at the top of the market theme, which I know is more suggestive than it is an actual bit, but we've been thinking about this at all. This is occupying a lot of stress in my brain beyond the IPO since everyone's talking about that. Like what is this actually symbolize in markets right now? - Yeah, yeah, I don't know a great take on that. One of the interesting things for me is like, and I'm a big proponent of index investing, but one of the things index people always do after factor people, like me or active people, they're like, we have these emotion free indexes that just follow their systems and then like, you have this SpaceX IPO and like these people are like, fall for the liver each other to get the thing in the index. Like the idea that like there aren't humans behind the scenes making decisions here in terms of what SpaceX is getting in and what it's not getting in is obviously ridiculous because they're all like, whatever their rules were, they're all pretty much out the window, right? Like all the major indexes have made some degree of changes, right to get this thing in quicker. - Yeah, well, if you're gonna have potentially, we don't know where it's gonna come out of the gate at, but potentially you have like somewhere between, I think it's a one and a half to a $2 trillion company. That's not a microcap. It's not even a small company. This is a substantial, substantial addition to any of the major indices and whatever index fund somebody owns or your mom owns that are 401K or whatever the situation is. - It was the way the biggest one ever, right? I mean, this is a Ramco, I think, was the biggest one ever, but it wasn't near this level. A Ramco is big and one point on what I was starting to say before about this because this is just, for the size and sake of comparison, I don't think I have sizes of these in front of me right now, but it's basically like, I have a visceral memory of Visa in 2008 when they do that offering and we're basically in the financial crisis. You have GM right after the crisis in 2010, which is Cash for Clunkers and all the other chaos that's going on there. You've got, and granted, this is where it's suggestive, it doesn't guarantee a market top or something, but it's like times of stress. Facebook in 2012, when Facebook was basically to be bigger than McDonald's and sell ads, ended up being prescient and all sorts of ways, Alibaba in 2014, which was massive, that was an absolutely ginormous one, and then Saudi or Ramco in 2019. And like all these come before events of market volatility or in the wake of some type of volatility, and they suck all the attention out of the room around these prices. None of those were adding the flow component of being chomped into an index overnight. And that's the part that is just so mind boggling to say, we are going to introduce something that's a massive version of all, massive addition to all these indices, pretty much as fast as we can possibly cram it in there. And that puts all sorts of pressure on not just the people buying, because this is a, this is like a $75 billion raise. So the company's getting a $75 billion, but the market's going to get. - Yeah, it's going to, yeah. Potentially a multiple on the capital race that's about to happen, and that's bananas. - Yeah, just thinking about like, when you think about the mechanics, that's really the interesting part. Like, first of all, who knows what's going to happen here, but if I had to guess, I would say, this probably goes up a lot at the beginning. I mean, there's going to be a lot of forced buying in a lot of different directions is going to go on, but then thinking also about like, what does that need, where's that money coming from? Like, obviously, you've got some other companies that are very, very large weights in the index that are very, like for the active managers of the cause of indexers, are also very large weights in their portfolios. And so, like, are you going to see selling pressure on an Nvidia or something like that, as the money moves to face SpaceX? Like, I don't know in the market as ways of sort of confounding all of us in terms of how it handles these things, but it's just, it's more rather than predicting it, it's more interesting for me just to think about it. And like, just on the index side, like, what is this going to mean in terms of what happens to SpaceX?
also what happens to all those other big companies in the index that are going to probably have some money coming out of them. We talked about this when we were doing our weekly recap this week too, where it's the pie has to equal 100. So if you want to make room, you have to take something else out. So as these indices think about how they're going to make room for potentially a $2 trillion company, they have to think about the companies that that basically borrows from, meaning like takes market share away from to put room in that thing adding up to 100. They don't necessarily have new dollars coming in. They're not pre IPO holders. That means they're going to have to buy this out of the available free float on the market. That creates a flow problem. Adam Butler has a wonderful tool basically mapping out some of the mechanics of this. We'll put a link in the YouTube notes. You're going to want to play around with this a little bit. But this idea that the index now has to make room somewhere for an absolutely massive addition. That has to come from free float. They're not turning around necessarily in selling stuff day one. As we're talking a lot of these fund managers, we're talking to families and people who own private shares, you have to come up with a strategy on what you're potentially letting go of in the IPO. If that's something you're doing, or how comfortable you are with the actual rules and regulations around when those people are even allowed to let anything out into the free float. Because it's not like it IPOs and now I turn around after it jumps on the opening day and I get to sell my shares. I'm going to work like that and that's going to make it even more confusing over probably a six month horizon. And then on the other side, you've got the active managers, some of which own it now and are effectively going to be in violation of their mandates when it's what it becomes public because it's going to be too large a portion of their portfolio. So that's not a ton of people, but just thinking about how does that work. There's a couple of very significant people who have that exposure and have been riding those marks really, really hot, but all of a sudden they're in a violation of their perspective if they don't unload something to that. So they're going to have to be four sellers. I would assume they can do it right by the index side of it, but still it's just interesting to think about like they're going to come out with this way overweight position. They're going to have to sell it. How does that play out? So I just think it's one of the most interesting things I've seen in my career in terms of like the mechanics of what goes on behind the scene in the markets. I don't think anybody can, I don't think anybody should be trying to take advantage of it. I think it's just interesting to watch. This is a fast name thing to watch. We're going to be talking about this way longer than we talked about the green shoe on the Facebook IPO. If you remember, you remember if you were there, you know what I'm talking about. But there's so many players too who have some type of vested interest in this thing actually working out in a favorable way. I think that's also really interesting here. Nobody wants, nobody really expects this IPO to fail dreadfully in any way, shape or form. We're assuming it's going to be over subscribed. We're assuming it's going to go up. We're assuming all these things were locally, we not mean you. And it's really interesting to think what's actually going to happen, what's actually going to play out. This is like watching a team that you think is going to be dominant in the championship go out. You have all the assumptions that they're going to kick everybody's butt. But the question is, what happens if any of this doesn't happen or if there's some surprise injury fluke problem? This is ripe for watching very, very closely. The other thing that's interesting is that the supply issue at the overall market level because you're going to have this, you're probably going to have two other trillion dollar ideas this year, just thinking about how the market absorbs all of that. I mean, that's not like saying that's the top or anything like that. But it's just interesting to think about how the market absorbs all of that supply. I mean, we've never had, we're going to have the three largest ideas in history probably back to back to back in the same year. Yeah. And that's part of where thinking about those like the Saudi or AMCO IPO, thinking about even like Visa GM and Facebook and Alibaba. You wouldn't have a run of competing size for these. And that's the other part with the gauge. If you're going to have these companies taking this much oxygen out of the rest of the markets, if you're going to force a bunch of indexes to have some type of rebalancing to digest these things, we're not just going to do it once. We're going to try to do this three times. And oh, the straight-ahor moves, but you know, fight. It's all fine. Hey, oh, this is at least, this is at least me because not talking about the straight-ahor moves for a while, right? When these IPO's come out, at least give us something else to talk about. Yeah, yeah. At least we'll have something new to talk about in the sense that we'll have more complexity mapped over the already insanely complex situation, right? Yeah, yeah. And who knows? I mean, we're not once to tell you what's going to happen. It's so hard to figure it out. And then the only other thing is like, when you think about the, like one of the things I think that happened in the 90s is you saw these, the IPO's came out, but then eventually the lockups expired. And that became somewhat of an issue for the market too. So I'll be interested, like obviously a lot of the people who hold SpaceX can't sell it when it first comes public. So it'll be interesting to see, because you're going to have some funds. I mean, I saw some of the numbers recently, like there's some funds with some crazy gains in this. They're going to have very, very, very large positions when this thing comes to market. So it'll be interesting to think, when those lockups expire, we're interested to see what those funds are due. I mean, just for fiduciary duty and the gains they have, they're going to have to sell some of that probably. Yeah, this, if you haven't read up on Rule 144 or any of these details, now's the time to go and look at it. You have a fund that's up big already because they have always 30 something weight to the fund of, you know, current valuation shares is a relative to their net asset value. You want to look at this. You want to know what that selling strategy is. Now's the time to check it out. This is the window here where you have to figure out what you're going to do because those funds all have rules and all of expectations that are going to follow. And they have to consider what's in some cases a grand slam for some of these people, which congratulations. We all dream of this moment. So hopefully they can get out with some of those gains and I'm sure they will. Smart people. I just want to see the data centers in space, Matt. Just give me the data centers in space and I'll be excited. You know, reading that S one, it did make me think it was a little aggressive, wasn't it? A touch aggressive, you think maybe like a small, it was a, I forget what the addressable market they put what, but it was quite large. Well, you know, when you're, this is what I'm saying, access returns has been thinking over a total addressable market all wrong. I think our tab now that we're going to build data centers in space is basically space, space time at infinite, like infinite space time is a total addressable market of access returns, even non-sentient beings can enjoy access returns. I would like to put that valuation on our company. Can we do that? Yeah, yeah. If we bring the audience to space in here, obviously it changes things a lot in terms of our evaluation and the data centers, like the data centers could be listeners. We can make stuff for them, more data center jams, like the AI in the data centers will listen to us. I mean, it's got to consume its information somewhere. Where's it getting its updates on things? The data centers should be part of our client picture that's part of our total addressable market. And hey, and this is the, like read the S one, two, this is a fantastic read. There's so much in there that again, touched on the aggressive side. As you said, I think that is a conservative framing of what is the actual statement on how this thing reads, but can a company own space and how much is space worth? And where will it be? I mean, we got a $600 billion company who's about to go public at one and a half or $2 trillion and they did. I think it was $19 billion that the SpaceX side of it did in business in 2025. So how's your little valuation multiple value investor heart feeling about these numbers? I'm just thinking call up injuries and horrors because access returns is worth a billion dollars. You know, we've got a, that's the valuation I'm starting with. I don't know what I'm, well, how much I'm raising or even what I'm going to do with it, but that's where we're starting. When your total addressable market is all of space and time, Jack, you're still thinking too small. Three commas, this four, at least four commas in this one. On that note, you should try to take us home before we go too far on this reputable. Oh, we're already in trouble. We're already in trouble. Excess returns on sub stack. Make sure you subscribe or there we got notes on everything we do, a lot of transcripts, a lot of great posts about the people that we interview. Meanwhile, wherever you're watching or listening to this like, comment, subscribe, all the things below we are out. Thank you for tuning into this episode. If you found this discussion interesting and valuable, please subscribe on your favorite audio platform or on YouTube. You can also follow all the podcasts in the excess returns network at excessforturnspod.com. If you have any feedback or questions, you can contact us at excess returns
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