## Detailed walkthrough
### [00:00](https://www.bilibili.com/video/BV18nnv6MEWd?t=0s) Daily Gains and Market Catalyst: 10-Year Treasury Yields Drop
The host kicks off this nighttime edition of the channel celebrating a strong daily performance, pointing out that his public portfolio gained $2,900 on the day. Reflecting on his investing journey, he notes how surreal that figure feels compared to his early days:
> “15 years ago, I used to dream about making $2,900 in a day, right? So we've come a long way. We've come a long way, baby.”
The focal macro event of the session is the downward movement in the 10-year Treasury yield. Although yields bounced slightly in the final hours of trading, the overarching trend toward lower yields sets up a massive tailwind for beaten-down, rate-sensitive equities. Lower bond yields remove pressure from interest-rate-sensitive businesses, providing the exact catalyst needed to ignite explosive rallies across cyclical, consumer, and real estate-adjacent sectors.
Before diving into the stock analysis, the host reminds viewers to like the video and subscribe, teasing a major Halloween promotion scheduled for October 31st for the "1000X" membership, featuring one-month, six-month, and three-year tiers via a pinned comment link.
[01:50](https://www.bilibili.com/video/BV18nnv6MEWd?t=110s) The Rate-Sensitive Playbook: RH, SoFi, Wynn Resorts, and American Express
When long-term yields drop, specific cyclical and interest-rate-sensitive equities stand to gain the most. The primary beneficiary highlighted is luxury home-furnishing retailer RH, which advanced 5% during the session:
> “You get that 10-year to consistently go down, you know, for the next, you know, I don't know, six months, RH, it's very simple game. RH stock's going to probably double.”
The mechanics behind RH are straightforward: high mortgage rates above 7% effectively froze the housing market, keeping consumers from moving and hammering real estate-linked retail. As yields retreat and housing activity unfreezes, RH has immense upside leverage.
```mermaid
flowchart LR
accTitle: Macro Yield Decline to Equity Expansion
accDescr: Shows how lower 10-year Treasury yields drive housing activity, credit conditions, and equity rallies.
subgraph Macro["Macro Shift"]
A["10-Year Treasury Yields Peak & Decline"]
B["Mortgage Rates Retreat below 7%"]
A --> B
end
subgraph Impact["Sector Impact"]
C["Housing & Moving Activity Unfreezes"]
D["Perceived Relief for Lending & Leisure"]
B --> C
A --> D
end
subgraph Beneficiaries["Key Beneficiaries"]
E["RH (Stock Double Potential)"]
F["SoFi (Sentiment & Multiple Expansion)"]
G["Wynn Resorts (Rebound above $100)"]
H["American Express (Consumer Spending Tailwinds)"]
C --> E
D --> F
D --> G
D --> H
end
```
The host broadens this dynamic to several other key portfolio names:
- **SoFi Technologies**: Often mischaracterized by the broader market as purely an interest-rate play. The host argues that CEO Anthony Noto has built a resilient powerhouse capable of performing in any macro environment—high or low rates, strong or weak consumer—yet the market still punishes or rewards it based on yield shifts. Lower yields will clear sentiment overhangs and spark a rally.
- **Wynn Resorts**: Positioned for significant upside once benchmark yields firmly top out, with a clear path back above the $100 per share mark.
- **American Express**: Positioned to reap massive operational and valuation benefits as consumer credit conditions and treasury pressures ease.
A major development broke in the tech infrastructure space regarding SpaceX's capital expenditure plans. While third-quarter spending came in slightly below Wall Street forecasts (roughly in line with realistic targets), the forward projection stunned the market:
- SpaceX’s projected CapEx for the December quarter is targeted between **$35 billion and $40 billion**, substantially higher than prior institutional expectations.
- Nvidia emerged as the primary direct beneficiary, reacting with an immediate **2% gain in after-hours trading**.
- Other hardware and semiconductor players, including AMD and major memory chip manufacturers, are poised to capture significant spillover revenue from this compute buildout.
While addressing the sheer scale of the projection, the host cautions that Elon Musk has a documented history of hyperbole when giving multi-year guidance, recalling outlandish projections like claiming Tesla would reach hundreds of billions or a trillion dollars in ARR overnight:
> “Is it gonna be the number he's talking about? No. But it's gonna be still very large numbers and so there's gonna be a lot of companies that'll make a lot of money from SpaceX over the coming years.”
Even after discounting the promotional nature of the headline figures, the sheer capital being deployed into computing hardware over the next few years provides a secular growth tailwind across the entire chip complex.
[06:50](https://www.bilibili.com/video/BV18nnv6MEWd?t=410s) Netflix Earnings: A+ Fundamentals and the Ultimate "Load the Boat" Dip
The biggest individual equity shock arrived after the closing bell with Netflix dropping sharply to around the $64 mark, creating what the host characterizes as a textbook value opportunity:
> “Let me put this very, very simple: buy, buy, buy. And I'm not talking buy, buy, buy, okay? This is a buy, buy, buy, load of the boat situation here with Netflix.”
The dip arrived despite Netflix delivering flawless Q3 operational execution. A granular review of the income statement reveals extraordinary operating leverage across the board:
The host explains that the post-market sell-off was triggered by perceived weakness in forward guidance. However, having followed and traded Netflix across multiple cycles, the host dismisses Wall Street's knee-jerk reaction:
> “One thing I can tell you is don't read anything into their guidance ever, ever. The amount of times I've seen Netflix come out and sandbag guidances just to then come blow it away is a long list of times, okay?”
Treating forward management guidance as irrelevant noise, the host concludes that Netflix has achieved a textbook compounding loop: revenues grow in double digits while net profits and EPS expand at quadruple the pace (+44% to +47%), continuously increasing the company's competitive moat and free cash flow generation.
面对奈飞强劲的财报，博主给出了极其激进的加仓策略：
> “I will, you know, if it's 64 bucks tomorrow, I'm buying more Netflix tomorrow. It's as simple as that. And regardless, I'll keep buying Netflix probably for the remainder of this year. I'll just keep loading up on shares because... Anything in the 60s or even the 70s is a steel deal in my opinion as long as you got a longer term horizon.”
博主强调，即便在短期维度下，根据最新的财报增速折算，奈飞明年的前瞻市盈率（Forward P/E）很有可能直接被压缩至十几倍，甚至达到惊人的 18 倍左右。面对这种估值，博主直呼这相当于市场在拱手送钱：“I don't know what else to say. Thank you. I like free money. I appreciate that. Like wild. Absolutely wild.”
在被问及奈飞是否是全美股市场当前最佳买入标的时，博主做出了明确的市值与时间维度划分：
- **全市场标的横向对比**：不属于全市场最强；如果不限制市值规模，博主可能会更偏爱 Celsius 这类高成长标的。
- **短期 5 周至 5 个月交易**：存在高度不确定性，短期博弈可能会选择超威半导体（AMD）。
- **千亿市值俱乐部与 5 年长跑视角**：博主斩钉截铁地下了定论：
> “But for the next five years, Netflix, best risk reward of $100 billion plus market caps in the world by a mile, in my opinion.”
A["订阅用户与现金流持续增加"] --> B["大举投入原创内容制作"]
A --> C["大举买断高价值体育赛事版权"]
B --> D["用户粘性大幅提高 / 竞品无法抗衡"]
C --> D
D --> E["营收稳健双位数增长 / 利润爆发式释放"]
E --> F["前瞻P/E被压制至18倍低位区间"]
F --> A
```
---
[12:16](https://www.bilibili.com/video/BV18nnv6MEWd?t=736s) 华尔街热议市场调整尾声与 AI 交易从使能者向应用者的过渡
博主切换视频，开始深度点评华尔街主流机构（包括摩根士丹利分析师迈克·威尔逊 Mike Wilson 等人）对于美股调整周期的研判讨论。华尔街分析人士指出，自 6 月份开始的这一波折磨人的凶险技术性调整已经消化了大量宏观负面冲击——包括早周期向中周期的行业轮动、动量交易松动退潮、对 AI 资本开支可持续性的怀疑、地缘政治冲突以及即将到来的中期选举焦虑。当前市场广度（Breadth）表现非常糟糕，但这恰恰说明整个抛售潮已步入最后阶段。嘉宾认为美股正处于调整周期的“尾局（Final innings）”，预计在接下来 2 到 3 周内完成底部磨砺后，年底乃至明年初美股将迎来非常强劲的反弹。
在 AI 交易逻辑的主线演变上，华尔街分析师指出内部正经历关键的分化与交接棒：
- **从使能者（Enablers）向应用者（Adopters）过渡**：此前几个季度市场所有的资金开支狂欢全部集中在半导体硬件、电力与能源配套等基础设施建造者身上。
- **商业化考验降临**：随着 AI 基础设施初步搭建完成，市场开始拷问这些巨额开支是否具备经济效益（Economic viability），并正在严厉惩罚无法变现的输家。
- **下一阶段主线**：到明后年，市场的兴奋点将全面切换至真正能落地应用 AI 从而实现营收与利润实际爆发的下游企业。
在宏观利率与通胀辩论中，针对核心通胀 3.7%、原油价格高达每桶 108 美元背景下美股为何没有崩溃的提问，华尔街嘉宾提出了与众不同的观点：当前利率走高的根本驱动力并非通胀失控，而是经济内生增长超乎寻常的强劲。名义 GDP 增速高达 7%，与 5% 的基准利率相比并不激进。相比国债收益率，目前真正的风险在于 AI 相关信用利差（Credit spreads）正在走阔，这直接关乎科技巨头发债融资的能力。
针对名义 GDP 运行在 7% 左右的极度过热状态，华尔街嘉宾分析指出这实际上是“一半实际增长、一半通胀贡献”（Half real, half inflation），体现了试图通过高增长来逐步化解庞大债务包袱的底层战略。美联储前理事凯文·沃什（Kevin Warsh）的政策哲学得到了嘉宾的认可：美联储主席无法直接控制国际油价，也无法精准控制经济引擎转速，高达 108 美元的高油价（尤其是柴油与航空煤油价格的暴涨）本身就会在实体经济中发挥抑制过热的“自然紧缩刹车（Natural governor）”作用。虽然 2 年期美债收益率暗示美联储可能落后于收益率曲线约 50 个基点，但在 AI 带来的全要素生产率提升加持下，这种适度落后完全在可控范围内。
博主对大摩分析师迈克·威尔逊（Mike Wilson）在利率与市场拐点上的预判提出了尖锐批评。针对威尔逊断言“10 月不会加息、市场调整进入最后几个回合”，博主直言这种结论自相矛盾：
> “Well, see, this is an issue with Mike Wilson's call here... He's calling, you know, we're in the final innings of marked direction. But yet he says, well, we don't know what's going to happen with oil. We don't know what's going to happen with rates. We don't know what's going to happen with this. Yeah. That's why you can't really make a call like that.”
[20:00](https://www.bilibili.com/video/BV18nnv6MEWd?t=1200s) The Micron Debate: Peak Cycle Fears vs. Capital Allocation
A heated debate erupts over Micron Technology and whether the semiconductor memory cycle has reached its climax. Bullish panel arguments point to unprecedented balance sheet strength, noting that Micron carries essentially no debt, holds roughly $100 billion in cash, generates an estimated $130 billion in free cash flow, and protects forward business through take-or-pay contracts covering 40% of revenue into 2027. Skeptics sharply counter that history repeats itself at every cycle top when order books suddenly evaporate, arguing that long-term purchase agreements offer zero protection once hyperscaler spending peaks.
```mermaid
flowchart TD
accTitle: Micron Capital Strategy Dilemma
accDescr: Comparison between Micron management's aggressive share buyback plan and the host's proposed cash-stacking strategy during peak cyclical margins.
subgraph CycleStatus["Peak Memory Cycle Dynamics"]
Demand["Record Near-Term Demand & Margins"]
DownturnRisk["Inevitable Memory Market Correction (1-4 Years)"]
end
subgraph ManagementPlan["Management's Plan"]
Buybacks["Massive Share Buybacks at High Valuations"]
RiskExposure["Balance Sheet Depleted when Orders Dry Up"]
end
Stepping in to calm the dispute, the host forcefully challenges Micron management's capital allocation playbook. Over the next year or two, Micron will post historic margins and unprecedented profits, but memory remains an inherently cyclical commodity that cannot sustain these peaks over a ten-year horizon. Rather than repurchasing shares at elevated cycle-top valuations, Micron should aggressively hoard liquidity on its balance sheet. Risk-free yields of 5% comfortably beat inflation, generate substantial interest income, and provide shareholders with an unshakeable cash cushion to exploit distressed market conditions once memory pricing softens.
- Steve Weiss warned regarding cycle peaks: “If the market, if the spending peaks, those take-to-pay contracts mean zero, like in every cycle.”
- The host voiced his deep skepticism of Micron’s repurchase plans: “They should not go out there and do massive share buybacks, in my opinion, over the next year or two like they're planning on doing.”
- Underscoring cyclical reality, the host advised: “Right now is a great opportunity to load the balance sheet with cash.”
---
[23:00](https://www.bilibili.com/video/BV18nnv6MEWd?t=1380s) Trimming AI Hardware vs. Doubling Down on Meta and Founder Mentality
The discussion turns to portfolio management inside the broader AI trade, where panelists are actively rotating out of pure-play hardware suppliers and reallocating toward end-user platform giants. Steve Weiss reveals that while he has not abandoned AI, he has substantially derisked by completely liquidating his major position in Micron months ago, selling Vertiv, and paring Nvidia down to a modest holding. Conversely, he used morning weakness—buying shares down $15—to increase his stake in Meta, making it his second-largest holding alongside Taiwan Semiconductor (TSMC). Meta sits on the downstream side of the capital expenditure cycle; with its fortress balance sheet, it can absorb astronomical capex while directly monetizing products across both consumer audiences and potential enterprise markets.
The conversation triggers a sharp debate over capital intensity and founder leadership. When a panelist claims Jensen Huang’s business is far more capital-intensive than Meta, the host vocally objects, stressing that Nvidia operates a fabless, asset-light model where TSMC shoulders the heavy manufacturing burdens. Meanwhile, the panelists praise the unique governance structure enjoyed by founder-CEOs like Mark Zuckerberg. Unburdened by short-term activist noise, founder-led giants retain the mandate to reinvest aggressively into ambitious multi-year platform pivots.
- Explaining his preference for consumer-facing AI giants over hardware suppliers, Steve Weiss stated: “Because I think Meta is a product company ultimately.”
- Defending Nvidia’s fabless structural advantage, the host interjected: “Jensen's got an asset like business model. Are you kidding me? Like he's the one benefiting from all these companies spending stupid amounts on CapEx and I'll do respect.”
- Highlighting the edge of founder-led companies, a panelist observed: “They find these problems and they seek to solve these problems. That's what makes founders special.”
- Wall Street price targets for Meta surged during the session, with Morgan Stanley and Wedbush analyst Dan Ives raising targets to $820 and $900 respectively.
---
[26:10](https://www.bilibili.com/video/BV18nnv6MEWd?t=1570s) Semiconductor Slump, Hedge Fund De-risking, and the November Buying Setup
Attention pivots to the brutal short-term technical damage inflicted across the chip complex. Semiconductors are enduring their worst losing streak in nearly two decades. Jefferies data shows the "Magnificent Seven" outperforming semiconductor stocks for ten consecutive sessions—the longest streak on record—while Goldman Sachs' Tony Pasquariello reports widespread hedge fund liquidation across chip holdings. Rather than treating this hedge fund exodus as a danger signal, the desk views it as a textbook counter-cyclical clearing event. Mid-October is historically a seasonally soft period for equities, and speculative leverage washing out sets up an exceptionally strong entry point heading into the historically bullish stretch of November and December.
```mermaid
flowchart LR
accTitle: Mid-October Shakeout to Year-End Setup
accDescr: Visual flow showing hedge fund de-risking in October leading to high individual stock volatility and a bullish year-end rally setup.
subgraph OctoberWeakness["Mid-October De-Risking"]
direction TB
HF["Hedge Funds Unwind Long Chip Trades"]
Streak["Mag 7 Outperforms Semis (10 Straight Days)"]
Vol["Individual Stock Volatility = 3x Market Level"]
end
subgraph ValuationReset["Market Recalibration"]
direction TB
Flush["Speculative Froth Cleared"]
Support["P/E Valuations & Earnings Fundamentals Hold"]
end
subgraph YearEndRally["Year-End Buying Window"]
direction TB
Seasonal["November / December Seasonality"]
Rebound["Aggressive Risk-On Recovery in AI Tech"]
end
The panel analyzes Morgan Stanley chief investment officer Mike Wilson’s advisory, which identifies the current sell-off as the prime window to add risk before a November rebound. Institutional research reveals that individual stock volatility has spiked to three times the volatility of the broader S&P 500 index, proving that underneath a placid headline index, violent internal sector rotations have already flushed out extended positions. With robust corporate earnings, grounded forward valuations, and sound secular fundamentals, the panel concludes that tech leaders do not need to catch down to the rest of the market, offering an attractive dip-buying window.
- Embracing the seasonal flush in semiconductors, a panelist declared: “I like the setup for positioning, if you're telling me, that the speculative community, which has been anchored to the semiconductor trade for the better part of the last three years, is going to lighten up their positioning.”
- Reaffirming Morgan Stanley’s tactical market outlook, a speaker noted: “Says the next market sell-off could be the time to add risk.”
- Backing high-quality tech fundamentals into year-end, a panelist concluded: “Individual stock volatility is 3x that of the market, which is a way of saying you were talking about rotations earlier, Joe.”
[30:00](https://www.bilibili.com/video/BV18nnv6MEWd?t=1800s) Macro Headwinds, Market Breadth, and Selective AI Exposure
The panel debates the conflicting signals across the broader market, wrestling with whether recent price action represents genuine breadth or merely defensive rotation. One speaker expresses deep skepticism about chasing cyclical risk while structural headwinds persist, pointing out that crude oil sitting at $102 per barrel and stubbornly elevated Treasury yields present unresolved macro risks. While the market technically broadened over the previous week, that rotation was restricted to defensive sectors such as healthcare and energy—the latter boosted strictly by surging crude prices. A true, healthy expansion would require participation from industrial stalwarts like Caterpillar and utilities, which has not yet materialized. Meanwhile, countervailing narratives continue to emerge: JPMorgan Chase CEO Jamie Dimon recently told *The Wall Street Journal* that the economy is booming, yet individual discretionary names tell a more fragile story. The speaker notes getting hit on Dick's Sporting Goods, which dropped from $144 to $121 following quarterly earnings, demonstrating that even top-tier consumer brand leaders face sudden punishment under present conditions.
Addressing concerns about stepping away from the technology trade, the speaker clarifies that while they are cautious about peak hype, they are by no means entirely out of artificial intelligence. Instead, their approach centers on capital preservation and holding high-conviction compounders rather than chasing high-beta speculation. The speaker stresses: “I've made enough money on the AI trade. I'm sticking with the ones that I think are permanent compounders.” Even if the AI infrastructure cycle does not peak within the next twelve months, the speaker is comfortable leaving the remaining speculative upside on the table in exchange for avoiding severe downside drawdowns. The portfolio remains anchored in cash-generative leaders: Alphabet and Meta represent major core holdings, alongside targeted allocations in Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC). In addition, Goldman Sachs is held to capture the impending resurgence in M&A and tech IPO pipelines, while Apple is treated as a consumer product business largely insulated from the AI infrastructure bubble.
- Oil prices holding at $102 per barrel and stubbornly high Treasury yields remain the key macro concerns preventing a full risk-on stance.
- Recent market broadening was limited to defensive healthcare and energy, rather than true cyclicals like Caterpillar or utilities.
- Consumer weakness is illustrated by Dick's Sporting Goods, which plunged from $144 to $121 following its quarterly report.
- The core tech allocation is concentrated in compounders: Meta, Alphabet, Nvidia, TSMC, Apple, and Goldman Sachs (for leveraged exposure to AI deals, M&A, and IPO pipelines).
---
[31:52](https://www.bilibili.com/video/BV18nnv6MEWd?t=1912s) Momentum Factor Rebound and Year-End Playbook
The conversation pivots to seasonal trading strategies as the calendar approaches November and December. Panelist Joe Terranova makes a forceful case for leaning aggressively into the momentum factor for the final two months of the year, framing it as the preeminent trade setup to finish strong. The other panelists tease him for “talking his own book,” but acknowledge the underlying logic: the momentum trade suffered severe damage throughout a grueling third quarter, triggered originally when Micron reported earnings at the end of June and set off a wave of semiconductor de-risking. Because momentum factors have been battered so severely over the summer and early autumn, they now offer an attractive asymmetrical setup, particularly as institutional desks look to pull forward expected January demand into late December.
```mermaid
flowchart LR
accTitle: Year-End Momentum Playbook
accDescr: Flowchart showing how Q3 momentum washouts lead to institutional FOMO and year-end performance chasing into January.
subgraph Q3_Washout["Q3 De-Risking"]
A["Micron Earnings (Late June)"] --> B["Severe Drawdown in Momentum Factor"]
end
subgraph Q4_Catalyst["Year-End Dynamic"]
B --> C["November/December Seasonal Risk-On"]
C --> D["Institutional Underperformance / FOMO"]
end
subgraph Year_End_Flow["Execution"]
D --> E["Wall Street Chases Hottest Stocks"]
E --> F["January Pull-Forward & Eventual Rebalancing"]
end
```
The host strongly endorses Terranova's seasonal insight, breaking down the mechanics of the classic year-end institutional chase. In most historical cycles, November and December provide a dependable window of risk-on sentiment where benchmark underperformance forces Wall Street fund managers to chase market leaders. The trading rule of thumb for this stretch is straightforward: run with the names that have already established relative strength, because institutional performance anxiety ensures that whatever is hot tends to stay hot. The host delivers the core trading takeaway: “If you're going to play from a trading perspective, the market on November, December, you want to play whatever has been hot.” That aggressive institutional bid typically carries prices straight through the holidays into the opening weeks of January, after which fund managers reassess and trim extended positions.
- The momentum factor has been heavily compressed since Micron's late-June earnings report, leaving it washed out and primed for a mean-reversion rally.
- November and December historically foster strong risk-on momentum as institutions chase benchmark performance into the close of the year.
- Capital flows typically push winners higher into January before any meaningful portfolio reallocation or profit-taking occurs.
- The host wraps up by reminding viewers of the upcoming Halloween promotion for the 1000X research platform, directing interested members to the pinned comment and a short five-minute overview video detailing the offer.
## Notable quotes
> [10:00](https://www.bilibili.com/video/BV18nnv6MEWd?t=600s) for the next five years, Netflix, best risk reward of $100 billion plus market caps in the world by a mile, in my opinion. — 浑水摸鱼清源
> [31:52](https://www.bilibili.com/video/BV18nnv6MEWd?t=1912s) If you're going to play from a trading perspective, the market on November, December, you want to play whatever has been hot. — 浑水摸鱼清源
[10:00] 浑水摸鱼清源: for the next five years, Netflix, best risk reward of $100 billion plus market caps in the world by a mile, in my opinion.
[31:52] 浑水摸鱼清源: If you're going to play from a trading perspective, the market on November, December, you want to play whatever has been hot.
Original transcript
[0:00] We call this a nighttime edition of the Reaction Channel. Welcome in ladies and gentlemen, hope everybody's doing phenomenal out there. So Look at this, public count up $2,900 here today. I was going to make a joke about this, posted this on X. And 15 years ago, I used to dream about making $2,900 in a day, right? So we've come a long way. We've come a long way, baby. Now, we have yields going down. I want to talk about what this means for countless stocks out there because you've got to understand that the 10-year moves down. We're going to have certain stocks absolutely boom. So we'll talk about that in this video here today. Looking forward to sharing my opinion perspectives there. SpaceX new CapEx numbers came out. and the ramifications for the semiconductor industry and what's going on there. One of my very important stocks just came out with earnings. We'll talk about what's going on there. The stock is being sold off as we speak right now. From there, I want to go ahead and react to this one. Mike Wilson, we're in the final innings of the market correction. That's going to be an interesting one to react to. And then I'm going to react to this one around semiconductors pricing in a crash. Looking forward to sharing my opinion and perspectives there. By the way, I appreciate everybody joining me as always. Thanks so much for being here. to do one thing, please. Please, real quick. Just smash the like button. Smash that little thumbs up icon. Make it glow. That's all I need from you guys. Additionally, make sure you're subscribed to the channel. You definitely want to be subscribed. Also, reaction channel. I got a very exciting... development here a thousand X we got a big Halloween sale that's going to be coming it's going to be Halloween day okay October 31st for thousand X we have a monthly option six month option and I think a three-year option depending upon how long you want to join for Okay, whether you just want to try it out for a month or whether you know what thousand X is and you want to join on a longer-term base It's gonna be a smoking deal. And so if you want access to that that will be the pinned comment down there today and Click on that, put in your email or phone number, and we will send over the deal when it drops on Halloween. Okay? Very, very exciting. All righty. So let's get rolling here. Tenure moving down today in the trading session, right? Okay. Moved up here in the last hour or two. But what's going on here? And what does this mean? And what type of stocks boom if you have a 10-year going down? Okay, listen. The stocks that will boom are the stocks that I've been buying very recently. Stocks like RH. RH is a perfect example. You know, up 5% here today. You know, you get that 10-year to consistently go down. You know, For the next, you know, I don't know, six months, RH, it's very simple game. RH stock's going to probably double. You know, like... It's not a complicated game, right? The end of the moral of the story is here, real estate's been dead. We all know this, right? You get that real estate market going, then we could talk about RH getting going, right? But when mortgage rates are 7% plus and no one's going to be moving in that environment, right? And so that kills anything real estate related and a stock like RH is going to get hit the hardest in that sort of environment, okay? They're just going to sell that stock off Right. Stocks like SoFi also benefit. Right. SoFi is very at least it's seen. It's not in my opinion, but it's seen as being very interest rate dependent. And it's not true. So I can be very successful in any rate environment. We've seen this from SoFi. We saw SoFi be successful in a lower interest rate environment. We've seen SoFi be insanely successful in a higher interest rate environment. Anthony Noto has that company clicking on all cylinders. They can be successful. You put them in just about any environment, strong economy, weak economy, strong consumer, weaker consumer. They get it done, man. They get it done. And so, you know, that's one of those stocks that... If yields are going lower, if treasuries are going lower, SoFi stocks are going to likely boom in that environment. But just understand that company can win regardless of the interest rate environment. It's just the stock price has trouble because people have a view of being a very interest rate sensitive, right? Stocks like win resorts. Win resorts is another one. Winning resorts, you get treasuries to go down. Let's say they peaked. Win stocks are going to boom in that sort of environment. Next thing you know, you'll see win back over $100 again, right? American Express, that's another perfect example. So a lot of those sorts of stocks will definitely benefit huge. Next up here, SpaceX. So SpaceX CapEx numbers just came out. So what they spent last quarter was actually a little below what Wall Street was expecting, but I call it roughly in line, right? So that wasn't very exciting, but the exciting number was... The CapEx for the upcoming December quarter, you're talking about that could reach $35 to $40 billion, which is significantly higher than prior Wall Street projections. So now this is very good news. Yes. You own NVIDIA stock. Certainly good news there. NVIDIA is, you know, they're the ones that benefit the most from this. Okay. All the semiconductor companies can benefit from this. Many of these semiconductor companies.
[5:00] sell into SpaceX different products and services in in different ways okay so AMD can make money different ways from SpaceX uh the memory chip companies obviously will make money off of this but Nvidia is going to be the biggest beneficiary of this major capex also they're talking about some crazy numbers being spent over the next few years listen I I was a Tesla shareholder for a long time OK, and I've covered that company for a long time. So Elon Musk, you know, he makes a lot of very crazy predictions and most of them don't come true. Do keep that in mind. But there's always like some level of truth in there. So, for instance, like they were trying to guide for like five hundred billion to a trillion dollars of ARR, like, you know, within like a year or two. It's like, you know, they throw out some crazy numbers, right, that they're not even going to get remotely close to. But the moral of the story is they will spend fortunes of money over the next several years Is it gonna be the number he's talking about? No But it's gonna be still very large numbers and so there's gonna be a lot of companies I'll make a lot of money from SpaceX over the coming years and That a thing of beauty and so but Nvidia is the biggest winner just understand that right But with that being said you know if I was to go and look at Nvidia stock I would love to look at Nvidia stock after hours here and see if there been any major move with Nvidia Uh this should be intriguing. So Nvidia, yeah. After hours, 2% upward move there. That makes sense. Right. Um, you know, if SpaceX is going to be spending that sort of money, uh, you know, much, but much bigger than expected. Like I said, Nvidia is the biggest beneficiary, so I'm not surprised. Nvidia is up 2% there after hours. Alrighty, so next up here, let's take a drink of water. Okay, so we got a stock of mine going down Chinatown after hours. What's going on here? Well, it's Netflix. Okay, Netflix. So, oh man. So as of right now, Netflix is trading $64 dollars after hours okay let me put this very very simple buy buy buy and I'm not talking buy buy buy okay this is a buy buy buy low of the boat situation here with Netflix so this is the best the best possible scenario could have played out here okay so Netflix is a stock I started buying recently right in the last I don know a couple months here and so my if you you know listen to the private group video I recorded and been talking about Netflix recently, my hope was good results, stock goes down. And we got exactly that, but we didn't get good results. We got stellar results, great results. Okay. So this was an A plus quarter here for Netflix. 12% revenues up, cost of revenue down 1%. Sales and marketing was only up 6%, so that's way less in revenues. That's good as well. Technology and development was a really high number there. That was up 21%, but G&A was only up 2%. So operating income exploded higher. That was up 37% year over year. That's a phenomenal number. Income before income tax is up 39%. So that grew even faster in operating income. I mean, this is exactly what you want to see. You want to see, whatever your revenue is going up, you want to see your revenues up double-digit percentage as a company, right? But you want to see your operating income exploding way higher than revenues. That's exactly what we got. You want to see your income before income taxes exploding even higher than operating income. You want to see your net income up even more as a percent than income before income taxes then that was up 44 You want to see your diluted EPS up even faster and that was up 47 That a that perfection That an A plus That a hundred percent man A hundred percent perfection from Netflix there Right now uh guidance So guidance was seen as weak Um listen I have covered Netflix I owned the stock on and off in the past and I covered that company you know in terms of paying attention to their numbers and their results for the longest time one thing I can tell you is don't read anything into their guidance ever ever the amount of times I've seen Netflix come out in sandbag guidances just to then come blow it away is a long list of times okay like don't read too much in their guidance I I don't even pay attention their guidance is irrelevant the litter of the guidance is irrelevant um when it comes to Netflix I don't trust it at all they just are one of those companies that will throw these guys out and then Wall Street would freak out about it and then they come to beat it and so you know the company is clicking on all cylinders it's an A plus quarter mmm the company you've got to understand this is a company that just gets more and more powerful as time goes on because they make so much money and
[10:00] money into more and more content and buying out sports rights. that then makes that company even more powerful and more powerful. And so this is just a juggernaut. I view it very similar to an Amazon type situation where Amazon You know, every quarter more packages are ordered on Amazon, more companies use AWS. It just makes them more powerful, more powerful that they can reinvest into those companies. products AWS or the Econ business and just build something you can't really compete with. Right. And so they just become more and more powerful. And so that's the situation we have with Netflix. I will, you know, if it's 64 bucks tomorrow, I'm buying more Netflix tomorrow. It's as simple as that. And regardless, I'll keep buying Netflix probably for the remainder of this year. I'll just keep loading up on shares because... Anything in the 60s or even the 70s is a steel deal in my opinion as long as you got a longer term horizon. But even on a short term basis like Netflix, where's Netflix's Ford P going to be at tomorrow? You know, we could be looking at a Ford P on Netflix tomorrow in the teens. Right? Yeah. I mean, you could be looking at a Ford P tomorrow on Netflix. of 18 Thank you. For Netflix? Okay. Thank you. I don't know what else to say. Thank you. I like free money. I appreciate that. Like wild. Absolutely wild. So let me answer this before we move on here and react to some videos. Do I view Netflix as the best buy in the entire stock market as of tomorrow? The answer is no. I wouldn't say the best buy in the entire stock market. I would say the best buy of stocks over $100 billion market cap. Netflix, as of tomorrow, is the best buy for if you have a five-year horizon, by the way. Over the next five weeks or five months, who knows? I would probably go with AMD if you put me on the spot for that. But for the next five years, Netflix, best risk reward of $100 billion plus market caps in the world by a mile, in my opinion. For stocks, period, probably go Celsius. But yeah, for $100 billion plus market caps, Netflix is the one. All right, let's react to some Wall Streeters. And today's Tuesday. You basically think that whatever. Would you call it a sell-off? I guess some rotation or weakness in the overall averages. You think that's over and we're going to start having better market performance at this point? Well, I think the average stock is done. I mean, it's been a really nasty correction. It started in June, right? I mean, this is sort of the rotation from early to mid-cycle. You had the momentum unwind. You've had this now concern around the sustainability of the AI capbacks. You have a couple wars going on. You have the midterm election anxiety. So, yeah, there's a lot that's been digested by the markets. breath in the market's been terrible. So I think we're in the final innings of this, but we still have to get to the next probably two to three weeks. And I think we can still finish the year pretty strongly and definitely into next year. The AI trade, that's already seen, that's... its worst days in terms of consolidating or worries about debt and everything else, and it will lead the market again? It depends on what part we're talking about, right? There is a transition going on within the AI trade from kind of what we call the enablers to the adopters, right? So all the spending that's been going on has been incredible for semiconductors, some of the power stocks, all the ones that benefit from the spending itself. But now that infrastructure is being developed, And the question is, is it economic for all the players? So the market's doing a good job of separating some of the winners and losers from and now what the market's going to get excited about next year is the actual users of this technology leading to better revenue growth and profitability. Normally, with... the with The entire market worried about the Fed and future rate hikes and 3.7% inflation. And, you know, whether the bond, the 10 years starts rising again, $108 oil would be a problem. Why is it? why is it less of a problem it seems like we've been grappling with that because of ai ai isn't as dependent on on oil, right? Well, rates are a restriction if there's no growth, right? But the reason why rates are higher, I think this is a differentiated view from a lot of folks, which is the reason why rates are higher is because growth is so strong. I mean, coming to this year, There was thoughts about the Fed was going to cut rates. But then, of course, growth has been much greater than expected, both earnings and from an economic standpoint. The Fed's reacted to that. They responded to that. And so, you know, 10 or 5% with nominal GDP running 7, it doesn't seem egregious. Where the risk is, is the speed in that adjustment and the bond volatility that's created anxiety in the financial markets. And now the one area I do think that deserves some attention is we are seeing credit spreads widen. in certain parts of the AI complex. That needs to calm down. That's probably a bigger risk than treasury yields, quite frankly. because
[15:00] That's where the spending is coming from. So that needs to calm down. Like I said, we've probably got two to three, four weeks where we still got to resolve this. We have another Fed meeting coming up. We have the midterm elections. We have some capital that still needs to be raised in the AI space. And that needs to play through, but I think we're going to get through it successfully. Part of the narrative about how you know, Trump's approval on the the approval on the economy is we haven't had a good GDP print because that one GDP print that we had was skewed by. by inventories or whatever it was, if you factored some things out, it was like a really... Strong, like stronger than you'd want even. So do we need a print before? You just said 7%. So what do you think? Yeah, you subtract the 3.7. You subtract core or headline inflation? Well, it's basically half real, half inflation. So this is the whole thesis of letting the economy run hot to try and grow out of your debt problem. So you think GDP is running hot right now? Oh, absolutely. That's why rates are up. And that's why rates are up. That's why stocks are okay, generally. I mean, they've been okay this year. We're up 10%, 12%. We've always said, right, stocks are fine, okay, with rates going up as long as growth is good and the Fed's not killing the cycle. That's what the market is questioning. Is the Fed going to pull away the punch bowl too quickly here and not allow the economy to run? We don't know the answer. I think they're going to be pretty judicious about allowing the market to tighten forward. They're not going to look purely at $108 oil seeping into the market. inflation and causing... 3.7% That's not going to be the primary number. It's going to be Let this run because there's some positive things causing rates to increase? Think about it, Joe. First of all, oil 108 doesn't really tell us the true story. As you know, product prices, well, diesel prices and product prices, jet fuel, that's the constraint. That's going to do its own tightening. So I think Kevin Warsh has the right philosophy here, which is like, look, I can't control the oil market as the Fed chair. I can't really control the speed of the economy. He knows rates are going up. He's allowing rates to go up. And he knows oil prices are up. That's your natural governor. Seven percent, probably seven, eight percent is probably too hot. So let the market do the tightening for him, whether it be oil and or race. What if Fed funds are way out of kilter with where the long end is? I mean, he can let it run hot, but it looks like they're behind the curve. They're behind probably 50 basis points. That's what the two-year yield is telling us. But that's okay. I mean, it's not out of control. You can stay behind because of productivity from AI. Yeah, we don't know how the war is going to resolve, how oil prices are going to trade over the next 6 to 12 months, which is the main driver's name. So no October hike, Mike? No October hike. Well, see, this is an issue with Mike Wilson's call here. Listen, listen, let me explain this. He's calling, you know, we're in the final innings of marked direction. But yet he says, well, we don't know what's going to happen with oil. We don't know what's going to happen with rates. We don't know what's going to happen with this. Yeah. That's why you can't really make a call like that. You know, you can't you just can't make a call like that because there's so many various factors that can happen. You might think like, oh, as long as we don't have you could say something like as long as we don't have anything get out of hand in the oil market or with rates or something like that, then we can have an end of a. this market correction, especially for a lot of the smaller cap stocks. But... You need to frame it from that thought process, not just like, oh, you know, this is like this. So many things that could happen. Like, no, you can't make that call. December's on the table. And more importantly, I think balance sheet. What are they going to do with the balance sheet? Are they going to keep funding the deficit through the front end of the bill market? Or are they going to back off on that? That's the liquidity is probably the bigger risk for financial markets than front end rates. And do we continue to see a breadth improve in the market? Does this broaden out or? Is it still going to be? Not like we saw earlier in the year. That was the early cycle kind of expansion. But we are going to see a rebroadening, I believe, once we get through this. You know, once the S&P finally does its final move, I think we can see a rebroadening. So we're almost at the end of the year. Is your year end target worth talking about or do we talk about next year? I think I think 2027 year end. Yeah, I think I think what we we have at 8300 for mid year May of next year. And I think that's very achievable. I think 8500 could be achievable by the middle part of next year. Wow. Okay. Let's get ready to make some money then, huh? All right. Let's talk some semiconductor stocks and listen to some Wall Streeters. This should be entertaining. Yes, of course I am. Closely this week, they report. Middle of the week. It reports this week. It's going to be a great quarter. The stock has not traded well. It's down 37% off of its June high, but it's up 62% year to date. That's fine. But Joe, you're a student of the markets. I'm a student. Jimmy is. Scott, everybody. - Isn't this sound so eerily familiar, that Micron six times, it's so damn cheap. And their order book is so big, right?
[20:00] That they can't meet all demand. Have you ever heard that before? There's one big difference. I've heard it about 10 times in my career. There's one big difference. Your point is well made, but here's the key difference. Everybody always finds a difference at the end of the cycle. Yeah, but this one matters. They have no debt, Mike Ronna. They have about $100 billion in cash. They're generating $130 billion in free cash flow. And what are they doing with it? They're recapitalizing the company by buying back shares at $6,000. That's what you think they had in prior cycles. A lot. A lot. Jimmy, it doesn't matter when the order books dry up. - Jim, let me ask a question. - Do you think the universe is gonna dry up? in terms of what they believe, I'll phrase it a different way. Their take-or-pay contracts for 40% of the revenue in 27%. If the market, if the spending peaks, those take-to-pay contracts mean zero, like in every cycle. Listen, I'm not going to dispute that with you. But that's what the bull case is. Hang on, hang on. Half their revenues are getting these. This is a simple question that we're disagreeing on, which we have rights to do, which is where is the peak? Where is the peak? And again, if we look back. All right, hold your horses. It's getting hot and heavy in here, okay? Listen, let me say one thing about Micron here, okay? I fundamentally disagree with what Micron's doing today. with their cash, okay, listen. They should not go out there and do massive share buybacks, in my opinion, over the next year or two like they're planning on doing. They're going to plan on doing some crazy share buybacks over the next year or two. I don't agree with that at all. They should stack cash right now. You're in the next year or two. You're going to make more money than you could ever imagine in this business model. Your margin is going to be the best they've ever been. It's going to be incredible, right? Probably not sustainable over the long term. Next year or two, fine. Next 10 years, probably not, right? And so Mr. Shorthill's capital here is correct in talking about like, this is not sustainable for the long term, right? And, um... And so since you know that, you know, Micron's gonna end up eventually having a much weaker stock price. I don't know if that's a year from now, three years from now, four years from now, but it will eventually have a much weaker stock price. So right now is a great opportunity to load the balance sheet with cash. load it with cash, Have it earn five. You can easily earn 5% a year on that cash right now. Right. Keep ahead of CPI by quite a big margin. Right. And then shareholders will obviously be able to sleep well at night because these companies will instead of spending all on share buybacks or extensive amount. Right. You're just going to have this crazy cash load. And that's generating massive amounts of interest income that is ready as soon as you get some drama out there. Right. And the memory market weakens and boom. There you go. Now we're talking. So. You know, that's what I believe they should be doing with their money. This is fun. I'm saying it's prudent to do it a year in advance. And I would agree with you that it peaks a year before spending peaks. I agree with you. What I'm saying is this cycle, and it is a cycle, okay, is longer than that. What happens if the demand story isn't close to peaking at all? Isn't that what the conversation is about? the so-called sasspocalypse but now it's just become now we're worried about the this the answer demand isn't waning at all the answer to your question which is the question lies somewhere between a year from now and four years from now most of the projections are the spending goes through the next four years i find that a little bit hard to believe but equally and just based on what i hear from managers of these companies i grant you steve biased of course they have their - But keep in mind, I'm not selling all my AI stocks, right? I've just reduced my exposure to the group. - So you've reduced Meta, have you? - No, Meta actually, I took the opportunity to increase the size. - But what's the difference between that and the others? Because I think Meta is a product company ultimately. So they'll benefit. They're on the other side of the CapEx cycle, right? So, of course, they're going to spend. They have a unique ability to spend given their balance sheet. They're also going to benefit from what they're spending in terms of their products they offer to the public. So if you're reducing your exposure to AI stocks, which ones are we talking about? We talked about Micron. We talked about Vertiv. You know, Micron was a really big position. It's gone. It's been gone for a few months now. You own NVIDIA? Again, small position, relatively small position. But you haven't reduced that, have you? Yeah, at one point I got out and then I got back in, lower prices, so yes. And it's smaller now than it was. Taiwan Semi is still probably my largest position. Meta, by the way, target today goes to 8.20.
[25:00] Morgan Stanley outperformed 900 by Ives. I bought some more meadow this morning. It was down 15 bucks. I'll be out of that extra over. But still, I think it's my second largest position. But I mean, that's a pretty right in the thick of it AI stock. But again, they have a unique ability, I believe. And I don't mean a bill unique of one to expand to different product areas as we're seeing. So if they want to go into the enterprise market, they can go in the enterprise market. Thank you. And again, I love the fact that Mark Zuckerberg is the only founder still running one of these mega-gap companies, aside from Jensen Wang. But he's got a very capital-intensive business, more capital-intensive than what Meta has. And having that founder's mentality to be... Thank you. What? More capital than 10. Jensen's got an asset like business model. Are you kidding me? Like he's the one benefiting from all these companies spending stupid amounts on CapEx and I'll do respect. What? Jensen's got the ultimate business model, man. To go into new areas without even make the chips. TSMC makes some chips. It's beautiful. Back as an operator, like we see it at Alphabet, and we see it at Microsoft. Well, the ability that you don't have to listen to shareholders at all by virtue of the structure. You think like a founder, which means that rather than just... Unless you're Brad Gerstner, you listen to him. Right, unless you're... Well, Brad Gerstner's not running a major company. No, but I'm saying, like... But I'm saying they find new areas. It's like their founder in Facebook. Think of how that company has changed since Facebook. They find these problems and they seek to solve these problems. That's what makes founders special. I think you said it before. The detrimental relationship for the neoclouds is all about treasury yields. basis points lower, then the neoclouds wouldn't experience the stress that they have right now. What about the semis, which are coming off the worst losing streak in like 20 years, right? How about this from Jeffries? The Mag7 have now outperformed the semis for 10 straight days. That's the longest streak ever. Tony Pascarello at Goldman talks about hedge funds retreating from semis. That feels like as much of a problem as anything else. You're sort of abandoning this trade. I don't think it's a problem at all. I actually like the fact that we are seeing lighten up their exposure to the semiconductor trade. Remember, we are sitting in the middle of October, which from a seasonal standpoint is generally a weak period. On the other side, November and December seasonally is a very strong period. I like the setup for positioning, if you're telling me, that the speculative community, which has been anchored to the semiconductor trade for the better part of the last three years, is going to lighten up their I think that's good setup. So then let's just say the selling volatility continues. We've got a couple of weeks left in the month. It's choppy, uneven. Maybe the market trades down. Is it a buying opportunity today like Mike Wilson suggests that it is? Says the next market sell-off could be the time to add risk. We advise investors to be ready for either a rapid reconciliation or a slower bleed into November Do you agree? We do agree. I agree. And the reason I said we is because we had some of our analysts do a look at individual stock volatility versus the overall market. Individual stock volatility is 3x that of the market, which is a way of saying you were talking about rotations earlier, Joe. We all know those rotations have been fast and furious. But it also is a way of saying there's been a lot of damage done. been for the last several years or whether that catch-up trade and that broadening, as stunted as it's been, can continue. But the overarching comment in the last option, which is what I believe, is that AI and tech is a buying opportunity right here, that it's not something where those stocks need to catch down to the rest of the market. The fundamentals support it, the valuations support it, the earnings support it. Yeah, I like that. And I do believe that this and the AI trade. Where I struggle is a lot of the commentary that I heard last week, which was, oh, here we go. The broadening trade is back on once again. I don't know if I see in front of me.
[30:00] if I see the evidence in front of me that I could get behind that. I don't know how to resolve oil at $102. I don't know how to resolve treasury yields that stay uncomfortably high. So I'm not so sure the place that I want to go is in that direction. But those are broad market risks. What happened last week, yes it broadened, but it broadened into defensive healthcare, and it broadened into energy because of high oil prices. I mean, what you really want to see is things that you were talking about just a minute ago, like Caterpillar or some of the utilities and things like that, to start to spread through and see a broadening that way. which is not what you saw yet last week. Jamie Dimon gives an interview to the journal and says the economy is booming. I mean, not naive to the risks of inflation and the war and oil prices and everything else. But it doesn't take sporting goods, right? I bought it, got crushed after the quarter, went down to 121. You know, I had at least 144. It's the ultimate consumer stock. Now, I think they've got some edge in terms of being, you know, the brand in the space. But yes, but, you know, just so my position is clear. All I'm saying is if I'm wrong and it's not peaking in a year, I'm prepared to miss it. I've made enough money on the AI trade. I'm sticking with the ones that I think are permanent compounders. And I'm ready to miss the flood and excitement to avoid the downside. Are you then also suggesting that you're staying away from these stocks for the year, for the next year, until you find out? I own Meta. Alphabet's a big position of mine. I own some NVIDIA. Goldman Sachs I own. Also levered to the AI trade and the M&A pipeline and the IPO pipeline. So I'm not out of it completely. I own Apple, which is more of a product company in the AI trades, AI deficient trade. So I'm comfortable with what I and Taiwan semi. So I'm not out of it. I'm just more selective. As we move into November and December, guess what? I want to own the momentum factor. The best trade of 2026, I think we go out with that being the strength. Talking your own book? He is, but also in December. It's sort of like a rule. We'll pull forward demand from January. But don't forget we've got, you know, in a great position with that momentum factor because it has gotten annihilated since Micron reported at the end of June. It's been a very difficult Q3. I just want to see what happens with the elections. the reporting... I mean, actually, Joe Terranova there at the end brings up a good point. Okay, listen, listen, listen. You want to make money November, December? If we get a risk on market like you usually do in November, December, right? Um, yeah, momentum is going to roll. It's going to be party time, right? And that's what you get most years. It doesn't mean for sure it's happening this year, but that's what you get most years. If you're going to play from a trading perspective, the market on November, December, you want to play whatever has been hot. Because whatever's been hot stays hot. And then all the Wall Street funds that need to chase the market, they move to those sorts of stocks. And so there's a huge year-end bid. And, um... Then that leads into January and then sometimes people move out of some positions after that. But yeah, man, that's where it's at. All right, guys, I hope you enjoyed today's video. I appreciate you for joining me. Once again, 1000X deal is coming Halloween if you want access to that sale. That's going to be the pinned comment down there. You can click on that and go ahead and put in your name and info. If you don't know what 1000X is, I record you guys a little five-minute video walking you through everything you're going to get access to and all that good stuff. All right, much love and have a great day.
