00:00Dan, I'd be remiss in not pointing out, when we talk about a lot of these big tech names, a lot of them are...
00:05way far away from record highs. Apple hasn't hit a record high since early December, I believe.
00:10Microsoft since October, and I think you have to go all the way back to August of last year, the last time...
00:15was it a record high? Yet heading into this Ernie season, expectations still seem high for...
00:20what they're going to post in terms of earnings growth and revenue.
00:24Yeah, I mean, I think...
00:25it's going to be interesting to see how the market investors react to it, because...
00:30there's pluses and minuses for all the names that are reporting this week, and it's...
00:35one of the most difficult earnings seasons, in my mind, that we've seen over the last few years.
00:40because there's no clear direction, in my mind, of how the stocks are going.
00:45to respond. So let's take them, you know, one at a time. If you look at Tesla...
00:50you can say, well, we all know the numbers have got to come down because the EV tax...
00:55credits expired at the end of September in the US, but you know that Elon Musk is...
01:00going to talk about robo-taxis and autonomous robots and energy storage.
01:05and full self-driving. I picked up my new Tesla this Sunday. You know, I love it, but...
01:10the numbers are too high. So what is the market focus on, especially at these value-e...
01:15and, you know, Microsoft's similar situation, where you know the numbers are going...
01:20parce que OpenAI est growing so fast
01:22mais vous savez que les losses
01:24associés à OpenAI
01:25sont aussi going to go up a lot
01:26et avec Meta, c'est une similar situation
01:29les chiffres sont...
01:30Les chiffres sont fantastiques
01:32mais les CapEx numbers
01:34avec MetaComputé
01:35et les chiffres sont augmentés
01:37et les chiffres sont augmentés
01:39et les chiffres sont augmentés
01:40et les chiffres sont augmentés
01:42et les chiffres sont augmentés
01:44et les chiffres sont augmentés
01:45et les chiffres sont augmentés
01:47et les chiffres sont augmentés
01:49et les chiffres sont augmentés
01:50des chiffres sont augmentés
01:52des chiffres sont augmentés
01:54et les chiffres sont augmentés
01:55de veel de 20%
01:57de temps costumé
01:58et les chiffres nous devait
02:15et les chiffres sont augmentés
02:00on those costs and I'm wondering if that is the real story over these next couple of
02:05weeks when these companies report doesn't matter what the growth rate is of everything else people
02:10to be more focused on the growth rate of those costs exactly and also how do you want
02:15to monetize that because if you look at names like a Google or an Amazon or Microsoft
02:20you go they already have big cloud businesses and that they can sell that
02:25capacity to other customers meta doesn't have that they're gonna have to build that and then they're
02:29gonna have
02:30to go you know up against those guys who already have big established business
02:35businesses and then you throw Oracle in on top of that so you look at me
02:40meta and you go well it's really they're in a tough spot because of it but how much of that's this
02:45discounted in the stock and you know the numbers are going to be really good where you think
02:50I think the numbers are going to be really good based on the strength of the ad market and how
02:54well they're doing
02:55they're doing in that and so it'll be well is this like the day Oracle
03:00reported when the stock was up a lot or is this like the next three months when the stock
03:05gets almost cut in half and I'd rather stay away and just see
03:10where the dust settles as the saying goes the market has to keep pitching but you don't have to swing
03:15well Dan outside of just meta when you think about all this capex that's planned I want to talk about
03:20how it's being funded because you are seeing a lot of these hyperscalers really tap the
03:25bond market and issue debt in order to fund some of these ambitions that was a big story
03:30this time three months ago pretty much how are you thinking about that dynamic as we await some of the
03:35these key numbers well I mean I wrote about it this weekend but I've got short
03:40positions and a basket of names associated with private credit because
03:45I think what we saw a tricolor and first brands and the defaults there and the
03:50pressures that caused I don't think we're done yet and I think you're going to see somebody before the end of the year
03:55have a big problem with one of these data center deals because for right now
04:00all of these names are getting funding I think by the time we get to the end of the year
04:05you're going to find out that some of these names are not going to get the funding because not
04:10everybody that's associated with AI is going to win you started to see that change at the end
04:15of October obviously with kind of the Google ecosystem of companies up about
04:2020% since then whereas the open AI ecosystem of companies such as
04:25Oracle or SoftBank Nvidia etc they're down about 20% since the end of October
04:30so that's why I worry that as we get towards the end of this year and
04:35we figure out well these guys are winning in enterprise and those guys are not and vice you know
04:40and the same thing in consumer I think you're going to see a continued shakeout in the AI trade
04:45and that's why we have a basket on that and also Japan as well where we've
04:50got some shorts around that because you know we've seen what can happen when the bond
04:55market goes into conniptions and you know up 41 basis
05:00points in two days with Japanese bond yields on the 40 year that certainly qualify
05:05and you know it's something you need to think about and to snap elections on I think February 8th.
05:10right now absolutely I we certainly saw the ripple effects coming from Japan for our bond
05:15market last week but I want to go back to that that basket that you have when it comes to public and
05:20private credit names and the short that you have on it's interesting that you're you know focusing
05:25on the credit names there the credit providers rather than the tech names themselves when it comes
05:30to those short positions talk us through the logic there well I mean I think the thing is
05:35is that the credit side of it is more like
05:40the credit side of it is more likely to see pressure in my mind where you've seen for example look at
05:45it's trading at 25 times earnings and the S&P
05:50trading at 22 times yet you're looking at the companies if you believe the estimates
05:55revenues are going to be up 57 percent so it is really big
06:00that have been arguably beaten down in the sense that the revenues earnings forecasts
06:05have gone up but the stock hasn't done much in you know
06:10since late October and so I think you're seeing in some ways
06:15there's more of that discounted in those names where the credit related ones
06:20I think you could see a lot more damage being done and so some of it's we've got some long
06:25earnings in AI equities we've got some shorts in AI equities but the credits
06:30shorts and the Japan related shorts are what we're trying to use
06:35to hedge the portfolio and quite honestly we're just trying to take down risk into these earnings
06:39because as I
06:40I said earlier you can make a case for them being up big on the other side of earnings or down big on
06:45the other side of earnings and I'd rather see where the dust shakes out and normally I have much
06:50stronger you know views on how these things are going to trade but you know we saw what
06:55the Oracle if it was all about the numbers the stock would have been cut in half since almost cut in half since
07:00since you know September highs
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