00:00Mark, yesterday you were unimpressed with the price action. How are you feeling this morning?
00:06It's pretty neutral today. We've actually just been discussing the KOSPI.
00:09It kind of finished in that weird range where we can't kind of say it's conclusively bearish or conclusively bullish.
00:14What I will say is the recovery, the bounce we saw on the KOSPI today was almost entirely driven by
00:19Samsung.
00:21That's not entirely unusual, but it's driven specifically because of fundamental news about Samsung
00:26potentially having a large amount of buybacks. I think the U.S. dollar amount was almost $50 billion in buybacks.
00:33So therefore, I would say on net, the price action was not great.
00:38You're right, both of you, to highlight that it's all about micron earnings tonight.
00:42That's just going to provide more volatility. Volatility should normally be just a negative.
00:48Obviously, we all look at kind of volatility adjusted returns if you're a trader.
00:52And, you know, there's a mechanical thing that if there's higher volatility, it means higher value at risk.
00:57It means lower ability to take leverage or margin.
00:59Now, what's weird at the moment is the retail participation is so large in these stocks.
01:04And they're trading at like a casino that's kind of rigged in their favor.
01:07Everyone knows if you go to the casino, the odds are in the house's favor and you're going to lose
01:10your money eventually.
01:11But there's kind of this perception that central banks and the U.S. administration
01:15are determined to get the stock market higher.
01:17And so therefore, this is like a casino with wild random returns that are skewed in your favor.
01:22And the reason I kind of go into that digression is that it's in this weird dynamic that normally a
01:28catalyst micron
01:29that we know is going to stir up big volatility, that would be normally just be a pure negative.
01:34But in this market driven by retail, some of that negative impulse is kind of slightly kind of negated
01:40by the fact that retail see it as a great positive.
01:44Mark, is there a case to be made that if this is some of the froth taken out of the
01:48markets,
01:48particularly in terms of the chip and AI trade, that that is healthy ultimately
01:53and sets this bull market up for further and more sustainable gains?
02:00I'm going to be difficult by like saying no to construction, but yes to the ultimate question.
02:05What I mean by that is I think that this is froth coming out of the market.
02:09I dispute the idea it's healthy. We talked about that since the market kind of became broken in May
02:15where that we're in this volatile end stage.
02:17We don't know how long it's going to last, but in 1999 and the GFC, it lasted about six months.
02:22So that's my my ballpark estimate, you know, but who knows?
02:25It might be much shorter. It might be longer.
02:26So we're in this kind of volatile end stage.
02:29We're expecting more of this kind of massive crazy moves up and down.
02:34I don't think this is the bubble popping.
02:36I do think we have a massive AI CapEx bubble that's going to be really, really problematic when it bursts.
02:42I don't think it's finished inflating yet.
02:44I just think we're in that volatile kind of end game.
02:46And I think we've got more inflation to come.
02:48And maybe micron earnings tonight will kind of stir it up without having any insight on micron earnings.
02:56And that really is dominant.
02:58I would say that my slight bias is that the current sell off isn't quite exhausted yet.
03:03But this isn't the bubble bursting, the bigger bubble bursting.
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