The smart money is moving, are you? In this episode, we break down why legends like Michael Burry and Peter Thiel are exiting the hottest trade in history, and what the Genius Group lawsuit reveals about the dark side of Wall Street.
💣 The Smart Money Exodus: Is the AI mega-bubble popping? Michael Burry has over $1 billion in put options on Nvidia. Peter Thiel sold his entire stake. SoftBank dumped $6 billion. We analyze what these massive exit signals mean for retail traders.
💰 The CapEx Black Hole: Big Tech is burning trillions on AI infrastructure, but will the math ever add up? We explore the dangers of rapid hardware depreciation, chip degradation, and the terrifying possibility that the returns will never justify the spend.
🌏 The Geopolitical Floor: Why the US-China arms race might be the only thing stopping the crash. When AI becomes an existential threat, do normal market valuation rules even apply?
📊 Portfolio Wars: The hosts diverge! Luke goes “Risk-Off,” slashing Alphabet and Palantir to raise cash to 21%. Krzysztof goes “Risk-On,” doubling down on data center plays like IREN Energy. Whose strategy will win? $GOOGL $PLTR $IREN
⚡ The Data Center Survival Guide: If the bubble bursts, who survives? Krzysztof breaks down why he is betting on top-tier infrastructure with locked-in AWS/Microsoft contracts while dumping the second-tier players.
🎮 GameStop 2.0 (The GNS Saga): Genius Group files a massive lawsuit against Citadel and Virtu, alleging systematic naked shorting. Is this the spark for the next massive retail rebellion against market manipulation? $GNS $GME
🛡️ Bulletproofing Your Wealth: Essential strategies for the coming volatility: distinguishing price from value, ignoring manufactured panic, and keeping your head when the VIX spikes.
🎭 Investing Lessons from Cinema: We analyze PT Anderson’s latest film to extract a critical lesson for this market: why rigid convictions kill portfolios and how the best investors adapt when reality shifts.
Segments:
00:00:00 Introduction – Superinvestors Making Big Moves
00:01:00 One Battle After Another
00:05:00 Having a Process to Improve Your Process
00:09:00 AI Bubble Headlines: Burry, Thiel, SoftBank
00:12:00 Market Manipulation and Retail Psychology
00:17:50 The Bear Case: Unsustainable CapEx Spending
00:23:45 Will AI Generate Enough Economic Value?
00:27:00 The Race to AGI and Winner-Takes-All
00:34:50 China’s AI Advantage and US Response
00:42:00 Geopolitical Implications of AI Investment
00:47:00 What Are We Doing In Our Portfolios?
00:50:00 Luke is Going Risk-Off with Alphabet, Palantir, ASML, Snowflake
00:56:20 Krzysztof’s Risk-On Strategy with Data Centers
01:00:00 Price vs Value: Taking Advantage of Volatility
01:02:30 GameStop 2.0: The Genius Group Lawsuit $GNS
01:09:30 Payment for Order Flow and Market Structure
01:12:30 Ghost Hotdogs
01:13:30 Black Friday Deals: Fiscal AI & Portseido
WSW – Full Video – EP 107
Luke: [00:00:00] Michael Barry, declaring that he has over a billion dollar set of put options on Nvidia and Palantir
I think I have a good investing process, but probably more importantly I have like a process to improve my process.
Krys: when the value remains obvious, then when the price goes down, you’re getting value. I mean, you’re buying a company at a better value, and that volatility in that way is your friend.
Luke: the sands are shifting uh, you don’t wanna get caught with your pants down
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Luke: Welcome to the Deep Investing Jungle with your host, Luke the Badger, Hallard, and Christophe the monkey. Karski hot in the news this week, are we in a mega bubble ai? We’re gonna explore the bull and the bear case around that, and also look at what a [00:01:00] couple of other super investors are doing. I’ll tell you what I’m doing.
I’m going a bit risk off. I’ve done a whole bunch of trades in the last two weeks or so. I’ll share some of those on today’s pod and Christoff, you have GameStop two all over again for us with a stop your tracking GNS.
Krys: Yes, sir. Badge. A rumor has it that you did a little bit of homework this weekend. Monkey assigned you the task of seeing one battle after another, which. For me was one of the best films of maybe the last five, 10 years. I was just so profoundly, uh, excited and moved by it for all kinds of reasons.
Political and literary and, uh, cinematic. What, what, how, how’d it go for you in your home cinema?
Luke: Like I was, I was keen to watch it ’cause you were like hyping it and then my buddy Tom said me. No, he wasn’t taken with it. So I, I just like, [00:02:00] oh, I’m not gonna go to the movies and see it. I’ll just watch it when it’s available on streaming. And I caught it over the weekend and it’s superb. Yeah. Really enjoyed the movie.
Very good. Tom Sanderson, I, I’m gonna have to go back and re-watch like a bunch of his movies. ’cause I loved Magnolia. I haven’t watched that for like 10 years. So I’m gonna go and check it out. But it’s hilarious. It’s kind of scary. Like I haven’t been, I was visiting the States recently, but I haven’t seen like some of this like essential, like civil war portrayed in the movie and it’s kind of cartoonish some of the stuff.
But like, is this really what’s going on on the ground in the states?
Krys: Yeah, funny you say cartoonish because the source material is from a Thomas pension novel, and that one he wrote on a kind of comic book register. So PT Anderson played with that a little bit. Uh. You know, I mean, I don’t want to God. Yeah. Spoilers. It’s, it’s, I, it’s, we don’t wanna spoil things, so, um, you know, right.
When ideologies [00:03:00] get so, uh, what’s it called? So, uh, stretched to their extremes, it almost feels like we’re in a cartoon, but on the ground it’s kind of weird. Yeah. Like reality is stranger for Yeah. Reality is stranger than fiction. And the extent of the polarization here, I, I don’t think it’s getting better.
Uh, and so seeing the United States, I mean, it’s a kind of modern reworking of, uh, what was happening, you know, long ago into, I mean the, the original novel Badger takes place in California, kind of when the hippies had their day, and now we. In the Reagan era and corporate interests are taking over, and it’s about kind of, if I, I, I could say this without spoiling anything.
It’s about how some ideologies get corrupted from, from both ends. You know, like the, the [00:04:00] people on the left get corrupted, the people on the right get corrupted, and you have this kind of weird zombie thing trying to, you know, make, make its way. And, um, it’s strange man. It’s a strange, strange moment to be alive.
And um, and I thought the movie captured that with both political and ideological clarity, but also humor.
Luke: Yeah, it’s really funny. Uh, DiCaprio is hilarious in it. Uh, Sean Penn is
Krys: Yeah.
Luke: Like I love the character he’s playing. and it’s very funny. You’re right. Yeah. Okay. Which we shouldn’t say too much
Krys: Yeah.
Luke: it has just
Krys: Yeah.
Luke: We’ll give the guy, we’ll give our listeners like a couple of weeks to check it out.
Krys: Yeah, no, definitely go. I mean, if there’s a movie to see, go see one battle after another Trust Monkey on this one. Um,
Luke: Did I, are there any like, investing lessons in it? I haven’t thought about this, but
Krys: investing lessons. [00:05:00] Oh, yeah, I could think of one.
Luke: Okay.
Krys: I mean, it’s a stretch. It’s a bit of a stretch, but I think one of the key plot points and ideas is that when you, when you get committed to a certain view of how things are,
Luke: Oh,
Krys: uh, you end up looking silly. And that reality, I would say is always more nuanced and more mixed, and more, you gotta, you gotta like, you gotta flex.
You have to move, you know, you have to adapt to what’s needed in the moment. As opposed to, this is my stake in the ground and I will forever hold it till, you know, something breaks. And I, I, I think being a little bit more nimble in how you approach investing would be my translation.
Luke: cool. Yeah, that’s a, that’s definitely important. Like the world changes and if we get [00:06:00] set like stuck in our, like the path we’ve always trodden, either you miss opportunities you just make the same mistakes over and over again. Like I’ve always said, I, I think I have a good investing process, but probably more importantly I have like a process to improve my process.
I’m always doing like annual reviews and looking and trying to like figure out how I get better as an investor. ’cause I’m 22 years into a thousand year journey.
Krys: Yeah. At absolutely. It’s like the machine that makes the machine, and it’s a little bit of contradiction in terms you have to stand for something. Right. I would say that that’s where you start, like politically or in life or in investing. You, you have to pick a game and you have to learn those rules, right?
That’s the fundamentals part. But then probably after you’ve mastered them or you’ve, you, you know what you’re doing, then you could check back, suffer reflexively, and [00:07:00] kind of start, you know, playing around the edges, knowing what you’re departing from, uh, enough so that rigidity doesn’t, doesn’t, uh, capture you.
And I see this actually both ways actually from, you know, ’cause I’m, since I’ve been kind of weaving in and out of the long-term, more short-term stuff, kind of trying to get my footing like a surfer might. I think the error happens in both directions, long-term investors sometimes. like once they select a company and say, I’m in this for 10 years, then it’s harder for them to admit that the times have changed and make revisions to a thesis, say,
Luke: or even
like your own have changed. Like, I’m gonna talk about a bunch of trades. I did in the last couple of weeks later in this episode. honestly, there’s a couple stocks I bought into like a year ago, just haven’t fostered an interest in them. So like, I shouldn’t own these things ’cause I’ve gotten, I don’t, I barely understand what they do beyond like the headlines, [00:08:00] so I’m clearing them out of the portfolio.
Krys: Yeah. Right. Uh, and then there’s stuff like in the more, uh, trade, like venue. There’s some people, uh, that I think completely ignore fundamentals. I mean, if you’re calling yourself a day trader, then that’s part of the game. You don’t care. You just react to price. But I think there’s more. I think sophisticated people that pretend you, you, you know that they think they’re doing something in the middle, but they’re not.
They’re too caught up in the price stuff and they can’t adapt to the, the larger picture. And so always middle ground, right? You always kind of want to find a more skillful middle, middle ground from which to operate. Learn the rules, learn when to break them later.
Luke: Yeah. Well, and we’re in one of those points right now, like if we, let’s turn the conversation to our headline topic for today’s episode. Like, are we in an AI bubble? The world is changing the sands, [00:09:00] literally the sand. Like the semiconductors are made outta sand, right? Um, the sands are shifting uh, you don’t wanna get caught with your pants down
Krys: Yeah. Yeah. You know what this reminds me of? A little bit of, I mean, I guess that’s the intention of like, you know what, what the people in France and the French Revolution were thinking, you know, like the aristocrats, everything’s fine. Everything’s fine.
Luke: let’s,
Krys: Until, until everything is not fine.
Luke: yeah. Yeah. Well, let’s look at, I said at the top of the episode, right? A couple of super investors, inverted commerce, at least, you know, famous investing folk, are making some fairly big moves. um, like I made my changes before of this stuff, but does, give me. pause for thought.
It does kind of encourage me that I’m thinking in the right direction with going a bit risk off. But in the last what, two or three trading days [00:10:00] we have seen, uh, Michael Barry, um, declaring that he has over a billion dollar set of put options on Nvidia and Palantir. And then you’ve also got Palantir co-founder Peter Thiel, um, has sold his entire stake in Nvidia and the large majority of his Tesla holdings. then also like MAs Sand SoftBank, they sold their whole stake in Nvidia for nearly $6 billion six days ago. Like we’re recording on the 17th of November, so like mid-November you’ve got a couple of quite prolific folk there are, I know Barry’s always been a. But, teal and SoftBank, definitely not. Um, so the fact that they are, I dunno if they’re short the market or they’re just basically like releasing capital from [00:11:00] these like big AI stocks, predominantly Nvidia, that’s the one that crops up in all three of those stories. That’s kind of telling. I think,
Krys: Well telling. Okay, let me, let me offer the counter view on that. And by the way, I think my own position is quite ambivalent. Uh, I think I, I will say at the end where I ultimately land, but I am definitely not in a, in a binary, I’m not looking at this in a binary way. Just let me state that up front.
Luke: and maybe just for the purpose of this, let me say as well, like, I’m also, if anything, I’m probably an AI bull. Like I’m, we’ll talk about what I’ve done and why it’s not because I’m bearish on ai. Um. but yeah. So let’s, let’s explore the, the bull and the bear case. I think there are strong arguments on both sides.
Krys: Yeah. So, uh, but, but the thing you just said, here’s, here’s the caveat. I want to. Lay on the lay out front. This is a little [00:12:00] bit from, I would call the, the, the medium term players in the market. The short, medium term players. You know, those guys that game pays very careful attention to inflows and outflows of capital.
And, uh, it’s the, it’s the, like, it’s, you know, kind price centric first. And over the years what I’ve learned, and I think I really believe this, it’s not even that I believe it, I’ve seen it with my own eyes. What retail investors forget is that any fund with billions of dollars in assets or hundreds of millions can kind of make the price go where they want it to go.
And that’s hard to accept for retail, right? Because when we make a trade, it does, it literally will not ever affect price at all. But we know this is a kind of Machiavellian space where people are always trying to do things for their advantage. And one of the core [00:13:00] playbook moves is when there’s fear.
When when, when these big guys sense fear, they deliberately try to drive the price down by selling or doing whatever fancy shenanigans to do that, using options and derivatives and whatnot. Therefore, in a sense, confirming that the fear is legitimate, right? And all of a sudden the retail investor sees over like, what we experienced last week, prices dropping 6% one day, 7% the next day, right?
Then the short term traders get their stop limits hit that forces more selling, and now you have real panic, right? That’s what the retail investor feels sees, and they all of a sudden start selling, you know what the big boys are doing. They’re like rubbing their hands in Glee saying Mission accomplished.
We got exactly what we wanted. We wanted [00:14:00] these shares of, call it, uh, iron Energy, but all of a sudden it got to 80 a share. We know that’s too high. We’re gonna drive it back down to, at the moment, 49, we get all these cells and now we’re gonna load up heavy with like long-term options or whatever, so that when it inevitably rebounds, they’re gonna make their hundreds of millions and retail and usual bought high, sold low, and so goes the game.
That’s one view. That’s kind of cynical, but I think it’s more true than not. What do you, what do you say to that?
Luke: Yeah, I think that’s some of it. Like that’s not, I don’t think that’s like the overriding thing. And probably that’s more in like smaller companies like Iron where you, ’cause if you’ve got like a couple of billion dollars, you can’t move like a stock like Nvidia. Um, but you can absolutely move like, you know, sub [00:15:00] $10 billion companies and you can do that by, you know, also by writing like short reports and doing all sorts of other, you know, supposedly. transparency, but also like virgin on market manipulation type things. Um, so yeah. So it’s a factor, but, uh, but is it like the main factor? I don’t know. Like, it feels to me like.
Krys: Well, badge badge actually, uh, sorry. Let me say one thing. It’s not, let’s f let’s not think like Maine or not Maine. ’cause there’s, it’s a confluence, right? It’s a complex system. So there’s lots of things. I think all I’m trying to say in terms of education is. And, and this stands no matter what degree of it is the, the short term price that you’re seeing is very likely a, a, a short term, um, way to psyche you out of a position [00:16:00] based on fear principles.
And if you have done your work, don’t basically, don’t fall for that particular gimmick on its own, just on what the price is telling you. That’s all I’m saying. And it’s part of the game.
Luke: that’s fair. Like you can. it’s easy in some ways to protect yourself against all of this stuff. just about like the things we talk about every episode, about being in the mastery of your emotions, having a plan, not reacting to what’s going on, trying to take a long-term view unless you’re doing, like, deliberately doing short-term things, take a long term view, like ignore year, the next two years. if you can do that, you’re kind of immune from these kind of factors, you can’t ignore everything. Right? There are some fundamental things in the world will, will probably influence, like say the five year horizon [00:17:00] for a lot of these US tech companies that are grounded in ai. And frankly, we don’t know how these things are gonna play out. And I can see, like support supporting forces that are going to continue to push valuations for these companies up and up and up. And I can see. Like a lot of rugs that could be pulled out.
Krys: Yeah. So shall we talk about the, let’s get into, uh, the, the, what we’re seeing in this moment, right after this weekend where there’s all these big boys selling out and, uh, you wanna take, uh, the bear case, you wanna say, you wanna talk about first, like why, why things look kind of scary.
Luke: yeah. Um, there’s a bunch of things like, I dunno which order to tackle these in, but let’s just hit like one of them. ’cause I think it’s quite interesting and it’s just like this incredible level of CapEx spend, like basically money that alphabet, [00:18:00] meta, Amazon, all of these guys are spending on AI hardware. And like, if I really pair it back, like we’re, they’re literally like some of these companies are committing essentially like trillions of dollars over the next couple of years into buying hardware. And there’s a couple of things that could go wrong with that, right? We, we had like the deep seek moment, um, like a year ago, uh, when we all panicked about Nvidia a little bit. We did a whole episode on that it looked like, oh, there’s these other models. You don’t need these masses huge data centers and masses of, semiconductors and chips and GPUs to do ai. You can do it with really highly efficient models and a lot of these models are coming out of like China, Chinese labs.
Um, so maybe the Metas and Co are spending a ton of money. They don’t need to. And then another sort of related to that same point is they’re spending all this money [00:19:00] it’s not like you’ve bought, say like, I dunno, like a car and it sits in your driveway and you use that car for like 10 years and at the end, you know, you sell it into the secondhand market and you buy like another car. Like they’re spending this money on technology, which. It’s sort of subject to quite forces. One is depreciation is so rapid for like the cut if you need, if you wanna buy like, cutting edge hardware from Nvidia it’s only gonna be cutting edge for like six months to a year and there’s like another generation coming down the track and everybody, you need like the next thing, you don’t need this old thing ’cause it’s basically it, uh, just doesn’t cut the mustard.
And obviously in a data center and you have like a massive thing. You have all of, you know, you have your older generations and you have new generations and you continuously trying to manage the cycle. But the, the useful life of some of this investment is actually probably relatively [00:20:00] short compared to a lot of other CapEx investment. I haven’t done any like fundamental research on this. But the other thing that’s dangerous with their stuff is like the workloads running through GPUs are really intensive. And they run really hot. And so actually these chips can essentially like burn themselves out. And that, that happens to some degree.
Like there’s some percentage failure every, you know, thousand hours of usage. but you know, maybe we, maybe we are seeing a higher level of degradation in some of this hardware. And so what does that all that amount to A, are these companies spending too much money and B, the money that they’ve spent actually gonna be useful for that long?
And they have to just continually spend trillions of dollars.
Krys: Right, which obviously they won’t have, you can’t keep. Uh, they’re not making trillions of dollars. I mean, as much money as meta and [00:21:00] Google and all these companies make, I mean, it’s massive, right? There are caps, right? There are limits to too much. There’s something called too much.
Luke: Yep.
Krys: Uh, you know, I don’t know, uh, that point.
It’s concerning to some degree for me, but I kind of feel at some point maybe there’s going to be a plateau. And, and mind you, this is a, a non-experts opinion. Uh, I could be completely wrong about this, but, but just because the, say, the rate of improvement with the GPUs was so, uh, stratospheric up to now, uh, does not mean that necessarily the next generations will continue to have to.
Increase so much that the older GPUs from like, as you said, six months or a year ago, are now like useless. YI, I mean, you [00:22:00] know, uh, that exponential curve is steep, but at some point it’s good enough or it’s plenty good enough. You know, I, I mean, I know this is an imperfect analogy, but the MacBook Pro that I bought, that I’m using now, when I bought it in 2021, I decided to get the complete sus, you know, maxed out chips.
The M1 Max Pro version, whatever, four years later, badge more almost five. And this computer is still shockingly powerful that it’s running multiple screens and doing all these things in computer years. That’s a long, long time, right? Five years. as imperfect as that analogy is. Let’s say you buy one of these Blackwell, whatevers today for an the same amount of money, the AI tasks.
I mean, maybe they, they won’t be good enough say to [00:23:00] run a fleet of cars because those always need the fastest, quickest. But to run inferencing and to run, you know, whatever training models, uh, you know, even if it costs you half a millisecond, eh, so I’m guessing there’s gonna be a plateau and you won’t need to deprecate, uh, all of it.
That it’s, that that’s a fee that, yeah, it’s, it’s, it sounds scary, but
Luke: yeah, like, and I, I don’t think, I don’t think this stuff becomes like instantly valueless overnight. Like it will be scaled down. It’ll be used for other things, but the peak demands are just increasing like every time, like Gemini really, there’s a new like Gemini model or a chat GPT five and Perversions, and now we’re going into like ai, which is like a massive, like paradigm shift.
No, it is. is no longer gonna be about asking questions and getting answers. [00:24:00] It’s gonna be about AI doing stuff for you. And you know, you may give it a task and it might have to go away and work on that for like a day. come back to you, check in with you, get more information, and then like it’s achieved your goal, whatever that thing was.
Some huge piece of research maybe, you know, furnishing the house you just bought. Like these are, these are legitimate tasks that we will use for. And so, um, like the demand is gonna be increasingly high. And so that’s like a bull case actually, because, there’s real economic value of AI doing real stuff that we will all find useful and the customers, these companies will find useful. But it’s also a, a kind of a, not, not so much a bear case, but it’s also like another reason why this CapEx spend has to just continue and continue.
Krys: Yeah, so, okay, so let’s, on this point, I’m saying [00:25:00] because of the massive, massive increases in power and speed for the last however many years that the chips have just been being upgraded over and over again, that.
They’re, they’ve become good enough and they’re gonna stay good enough for much longer than the bears say, where you’ll need to update to the latest thing or your previous stuff is garbage. So I’m not, I’m not buying that, that bear case. Exactly. Um, I think the pace will just be much slower and, and more manageable.
Alright, so what’s next?
Luke: Well, it’s, it’s like, I think this is the core argument now, right? So we, like, we’re spending a crap ton of money on this stuff. really the, the core argument is like anything, like you buy, you make an investment in something. And you expect to get some kind of return out of it. Like I buy a car, I expect it to be able to take me to the shops and take me on vacation and like, you know, play like video games at [00:26:00] Tesla and have tra mode and do widget, right? We, so we’re spending as a society, these tech companies are spending a ton of cash on infrastructure. Like it’s kind of doing fun stuff and there’s certainly signs like we’re getting real economic value outta these tools. But will the economic value ever kind of reach the point that it justifies that crazy ongoing level of investment? Like I think that’s a legitimate question mark. And to me that’s like the big rug. the big one where, know, meta spend trillions of dollars of CapEx on AI and they then make these capabilities available to like their users on Facebook and Instagram and what. And maybe they sell some like cloud type stuff.
They don’t really do that, but maybe they do that in the future. But if they can’t recoup and make a profit like the investment they made, um, then that’s a [00:27:00] pretty flawed business model. that a bit like a bit extra on that. Like you might say, well obviously then that’s done. Like they wouldn’t, as soon as they realize you can’t make enough money out of the stuff, they’re gonna slow down their spending. But they’re not because of this other factor of a GI, artificial general intelligence and clearly Zuckerberg, but probably to a similar extent the other leaders of these competing companies, like these guys believe whoever hits a GI first is, is gonna potentially be in like a winner take all situation ’cause they’ll then accelerate past everybody else and be almost uncatchable. And so, so for that reason alone. That in mind, I don’t know the guy obviously, but in his mind I can see that his real technologist he’s a real futurist in the, the way he navigates meta and their strategy and [00:28:00] alone would be justification, I think, for him to spend at all costs. But if that, like, if they don’t win that race or if it’s actually like a false race, like a, like a GI isn’t to be found in the direction we’re going then you, you know, then they’re gonna spend anyway even if they’re essentially like losing money on every bit of like data center chip that they buy. that could be trouble. I’m not pointing a finger at meta particularly, but this same argument I think potentially applies to like all of these big guys, including Tesla, right? Including
Krys: Right, you mentioned Tesla and that’s interesting because, uh, I think one of Musk’s recent tweets was him talking about the way the optimist robots are going to, you know, become the world’s best surgeons. And it’s straight out of sci-fi stuff. And we know Musk [00:29:00] is a salesman and the showman. And simultaneously, he also has built the most staggering technologies of in the human history.
So in some sense, badge, this kind of feels to me like a, like a, you know, almost like a, um, I don’t wanna say binary, but you know, two paths diverge in the woods. And one you say you just don’t believe, you can’t believe, you can’t allow yourself to believe that these kinds of technologies are possible. You know, robots, curing, curing diseases.
And on the other hand, you have people seemingly far along already on the path to actually making them a reality
Luke: I mean, let’s, let’s just to not, I, I just wanna, ’cause I think you’re making a really good point, but it’s a kind of a bad example with do robots doing surgery. ’cause there’s a whole bunch of reasons why that will be one of the last things robots will do, [00:30:00] as in autonomously. Um, but there’s a whole bunch of very valuable things that, like Optimus Robots will do. soon as they’re in, like in the general public or in warehouses or on Mars, like for there’ll be decades where they’re doing a lot of really useful stuff.
Krys: Right. Okay. So, but the, but the same point, uh, goes and I think, for me, the bare bull issue case with this is not so much will these things ever happen. I’m, I’m a bull and an optimist in that sense. I think the fundamental question is, will it happen soon enough so that the financial balance sheet doesn’t explode?
I think is, is where I’m at. You know what I’m saying? And like that the companies need to start recouping some of these investments a little bit sooner than later. And where I land on [00:31:00] this, I’ll, I’ll just kind of in my mind take it case by case, like Tesla. I think because the Robo Taxii stuff to me feels imminent, I think they’re gonna make it.
They’re gonna make it. And maybe that’s why they become one of the world’s most valuable companies, if not the world’s most valuable companies. I’m betting over on Tesla,
a company like Medi say, you know, with the Metaverse and uh, be, it’s been in the shadows for me, so I don’t really know what their updates are exactly.
How quickly will all that be able to recoup their massive investments is a greater question mark. So, I don’t know, maybe they’re going to suffer a major drawdown, which the recent earnings and stock indicates that’s the current direction. Uh, company like Google. Meanwhile, uh, I’d say I’m also bullish on, they’re investing massively.
They just announced another, I think 40 billion in, uh, investment in Texas. You saw Buffet bought over the week, [00:32:00] or the filings revealed. Buffet bought a huge position, uh, which actually I think is an important sign for the Bulls, right? When, when, when Buffet buys your company, uh, he’s done his research. So he’s betting on Google, not a bubble.
so yeah, I don’t know how to land, land that, um, other than maybe it’s also a little bit of a mixed bag. Not every company’s gonna do it, but I think the most powerful ones will, and they will do it in time to, to not explode. That’s, that’s my,
Luke: look, I, I
think you’re right.
but, um, and I think I, I agree with your judgment on like those companies you named, but the nature of a bubble is that like when it pops ev the ass falls out of everything. The good stuff and the trash and the good stuff. Like persists and navigates its way out of it.
And then, you know, you get back to like the next cycle, the new normal. [00:33:00] And maybe like the goof, the goof of bits, maybe the, the alphabets survive and maybe the metas don’t. And I don’t think that’s the case. But, um, you know, some companies won’t survive a blowup. Probably smaller companies won’t survive like a blowup of this crazy levels of AI investment.
Krys: Yeah. You know, let me talk about a, a couple, the moment I find my own portfolio in King of the Jungle right now, uh, I don’t know if you, you saw I made a couple moves on Friday, uh, in our dolphin trading channel. Uh, and I swapped out two, uh, data center plays, bit Farm and white Fiber, and I added to, uh, a data center called, so Una, um, SLNH ticker.
And my reasoning badge, uh, was, uh, I’m sorry, in, in, in order to add to what, what I felt are my top two, which is iron energy and cipher [00:34:00] mining or just cipher. ’cause they’re pivoting away from the Bitcoin mining stuff. Fundamentally, uh, I’m happy owning the top two because they’ve already signed deals, mega mega deals with, uh, Microsoft and Amazon’s AWS.
And those contracts are for years and years and multi, multi numbers of billions. So that’s already been signed the. I want to get rid of the lower end players call, call it the second tier because, uh, like, you know, bet on the best. Uh, because who knows with the financing what might happen. But I did take on more risk for high reward with Sauna just because I, I, I think their operations are, are quite good.
It’s just the financing that’s risky. Anyway, that’s a tangent, all of which is to say why am I still happy to own, uh, these data centers? Because I think in this moment, I don’t know if [00:35:00] this is a good argument badge, but it feels like the momentum cannot stop. And when you hear all of these across every, every sector saying, um, we we’re investing not less but more and we cannot fall behind, plus the threat from China.
Plus this idea that every last megawatt will be sold. Uh, that’s why I think it’s a good place to position yourself. Now, is that a bubble? I mean, when something feels inevitable and there’s no way but to invest in it, it’s, it feels like it’s both a bubble and one that, that you can’t afford to pop or society can’t afford to pop somehow.
So other than the kind of queasiness around the financial details where that, those middle players, I think like core weave we [00:36:00] saw is, is, uh, looking really shaky and like, yeah, call it the middle players, they’re in trouble, right? Because their financial, uh, distress is greater than whatever they, anybody is willing to pay them.
But these top players, I just don’t see. Uh, in the context of China, like running away with this stuff, you know, and threatening to take over. How, how we say, okay, we’ve had enough.
Luke: How you’re using the term top players Because like if by top players you mean like mature, incredibly well capitalized companies that can survive like a multi-year, going into the wilderness and. Everyone being quite negative on like, say the, let’s say the value of ai and then that’s how the bubble bursts.
I don’t, it could be many things that cause it, like those mega caps are gonna be okay. when you say top companies, if you say, if you’re saying that to mean like companies with a really unique capability that are doing something quite [00:37:00] interesting, but they’re still like small companies that don’t have like a, a fortress balance sheet. the, some of ’em are gonna get wiped out. Maybe sometimes it’s deserved, sometimes it won’t be deserved, but they’re just gonna, like, they won’t be ready for what could be if a bubble burst, what could be like a really ugly couple of years.
Krys: Yeah. Yeah. And maybe, I mean, this is me talking through. These things with you live, you know? So that’s why when I said I sold two of those, what I call middle tier data centers, I think that’s what I’m reacting to. I’m like, you know, they’re, they’re probably gonna be fine because of this unstoppable momentum, but like, to your point, you know, if things really go bad, they’re done.
And that’s why I, but I’m not touching Cipher. In fact, I, I added to Cipher, and I’m not touching iron because from that perspective, I think neither Google nor Amazon nor Meta, nor Apple, nor Tesla, are gonna be [00:38:00] okay enough if they can’t get the power. I mean, that’s the thing you keep hearing all the time.
You could have all the chips you want, but where are you gonna get the power? So if iron goes away, all of a sudden, or Cipher goes away, then all of their progress goes away. Then what? Right. So I’m saying, I’m kind of saying. Uh, uh, maybe I’m trying to thread the needle by saying you’re right about, obviously the mega caps will eventually find a way, but I’m also saying, or hear myself saying, even the smaller companies like Iron will in this moment make it, because at this point in, in this build out, we’re in the early stages and nobody has said anything, but it’s only going to increase in both pace and expenditures and so on and so forth.
So where else would you get the power?
Luke: Although
Krys: Right? I mean, I mean, in other words, in other words, let me say it this way, for iron, let’s use iron in this moment. Um, for [00:39:00] iron to kind of explode, they would need to stop getting contracts.
Luke: Yeah,
Krys: So that would mean Google, called Google or Microsoft all of a sudden said, we have enough of what we need already.
They’re not gonna, it’s not gonna be some other, call it less experienced pop and shop mom and pop shop that they’re gonna get their power from. So that would be equivalent of those big players right now saying, yeah, we have more than we need. But what we’re hearing is exactly the opposite.
Luke: but this
is what you’re not hearing Christophe right? Chris, you’re not hearing this. Christophe like, if the bubble pops, these companies will stop spending. ’cause if there’s some, like if, if the bubble pops for what, like any of the reasons we just talked about, will, the, the mega caps will massively slow down their CapEx investment. might write down like a bunch of. Like this trillion dollars of investment they’ve made they might go, okay, look, we were the bubble burst. We were too far ahead of ourselves. We all got excited about ai, [00:40:00] but we need to give like the software a couple of years to catch up so that we can then generate economic value.
Like I’m just saying, this is one possible frame of mind, let’s say in a year’s time. And if, if that’s where like the leaders of these big tech companies end up, then they’re gonna massively slow down their spend and they’re gonna pause like the data center investment and they’re gonna be looking at like efficiencies either in like model design or energy usage and things like that. So you know that there are very tangible reasons why if the AI bubble pops, there might be like genuinely a need for less energy and then that that does cause problems for companies like that. I’m not a bear on this stuff.
I’m just saying like yeah, potential way outcome.
Krys: yeah. No, I, I, I get that. I think maybe it’s, it’s the larger context. I’m, I’m gonna bring China into this again. I don’t know if the, I don’t know how [00:41:00] accurate this is. It feels accurate to me. So I’ll, I’ll say that when you go over the China, and by the way, I’ve been doing some poking around, uh, Chinese company, which, uh, if I invest in it, it might be breaking my fundamental rule of do not invest in Chinese co companies ever.
Uh. Ticker XPEV. But that’s, uh, totally for, for another day. When I’m poking around China right now doing my due diligence, I’m hearing seeing left and right that they are in, uh, kicking our ass in terms of energy generation and power supply and manufacturing. And that when you go over there, it’s like living in the science fiction society that Westerners could not believe is already the case.
If I think about that context and say the bubble bursting for ai, that would, I think, go hand in hand [00:42:00] with saying, we’re gonna let China win, or China has won. And in terms of even call it real politic, you know, what that would mean for the world, what that would mean for the United States. I would venture badge to say that the US would rather like overspend and, and make the bubble bigger and more obscene than openly say, we have to stop now because that would mean China’s gonna win.
And I think that’s one of these, these game pieces on the chess board that’s like we, we won’t let that happen. Like admit the defeat basically before, you know, like early saying, okay, you guys won. We just can’t, we can’t catch up.
Luke: And look like Luke agrees with you, but for the purpose of this conversation, if I’m trying to play the bear. Like maybe the US cannot catch up, right? It’s so far behind China in [00:43:00] terms of energy generation and the, the pace of energy generation, it’s never gonna catch them. So the US is then therefore dumb to play that game it can’t, it’s an unwinnable game. They have to change the game and play like a completely different set of rules that don’t require unlimited energy. ’cause they lost that race already.
Krys: Yeah. Right. And I think now we’re saying sort of, yeah, the same thing both from Bear Bull bullish perspective. Like what do you believe? Do you believe it’s more likely that the US kind of, because we fell behind, because we had dumb policies, because we didn’t invest in batteries soon enough because our grid has fallen apart, blah, blah, blah, that China.
Has won, and now we’re going to, you know, openly kind of become their slaves because, you know, in the ai science fiction world, that’s a possible outcome, right? Where their robots just take over or are we gonna fight to the death? You know, are we gonna [00:44:00] just throw absolutely every last thing into this thing?
No, stop until something literally explodes because it, you know, the, the, the physical walls of the thing burst. And my bet, I think what I hear myself saying is, is it feels improbable that the country that makes Nvidia chips, you know, the thing that runs all of it would, would exceed defeat early. So I’m saying the, the, the, the part, the bubble’s gonna keep growing.
Luke: Yeah. I mean, I, I agree, but not for the reasons you just said, like, I’m, I’m still like a AI optimist and a technology optimist. But my, my sort of point on that stands, I think like, I don’t know, I’m thinking just, shooting from the hip here, but like, you know, how would the US change the game? Well, like escalation of cyber [00:45:00] warfare, like turning into like a full on actual war. Um, you know, there’s plenty of precedent for that, right? In, in, you don’t have to go back in very far in the history books to, to see, uh, you know, how economic challenges spill into like, real conflict. Um, yeah, I mean, I, I, I dunno, I dunno where we go, but like, some of the, some of the places we go are very bad and they’re like, they’re way worse than, like losing the AI race.
Krys: Well, yeah, of course. I mean, then you, we get into the doomsday scenario stuff, but, so anyway, maybe in summary, I’m saying out of the fear place that the spending has got ahead of itself. Yes. That’s scary. Yes. Uh, from the pure financial perspective, it doesn’t look pretty. It doesn’t look comfortable. And the my flip side is there is no, at this point, way out because it’s an existential [00:46:00] geopolitical threat.
And Yeah. And it has to keep going. And there’s a real, real underneath it, right? So unlike the internet, uh, bubble, things are actually simultaneously being built and developed. And I go back to is it gonna be fast enough? And I think it will be, um, the, the big guns, the big players in this space will make it happen.
But under no circumstances will, one of them throwing the towel early, I think is, we’ll, we’ll find out, right? But, uh, out of two bad options, the one is go keep going forward.
Luke: yeah, yeah. Let’s, let’s turn it to like how, what we are individually actually doing prepare for some of this stuff. ’cause you don’t want to get with your trousers down. So you just shared of changes in your own portfolio you’ve made and you know, your own thesis. Steering your away [00:47:00] from like those middle players as you termed it. Um, where are you on like the risk spectrum right now? And I dunno how
Krys: Well bad. Uh, yeah. Well, I’ll tell you, we’re recording this on Monday, November 17th. Uh, which time-wise isn’t ideal because you know what happens on Wednesday, Nvidia reports,
Luke: Yeah.
Krys: um, and I guess the whole world will be watching that as, as usual. Uh, in one sense. I don’t know if you agree with me, I cannot see a world in which their, you know, actual numbers that they report are anything but.
You know, absolutely out of the world because of all the other companies that have already reported. Right. Plus the increase in spend. Maybe the thing that will be terrifying is the guidance.
Uh, but again, I can’t, I don’t think it’s mathematically possible, right? For AWS and Google and [00:48:00] Microsoft to have said, we’re spending more than ever and we’re gonna continue spending more than ever.
And then Nvidia comes out and says, uh, sorry, our numbers ain’t too great. Uh, so I, I mentioned that only because I’m trying to stay grounded in a ki kind of mathematical reality. To get to your question, you know, what am I doing in preparing for a potential bubble? I think so far I’ve kind of done not that much because the majority of my investments as seen in the King of the Jungle is all these plays.
I have eos. Which is now looking like incredibly important and central to all of these AI data centers, power build outs. So that I haven’t touched that. My iron position is still very high. I added to Cipher because of the recent drops. So I’m only, I’m trying to take advantage of this volatility saying, I think it is, this [00:49:00] is a passing moment of fear and everything else.
I’ve kind of stayed the same, just cutting some of the, the, um, lower tier players. So I have not yet made any moves in terms of, uh, risk off. I’m kind of betting the other way at the moment.
Luke: Okay. That’s cool. Yeah. Okay. I hope that works out. I’ve not made any big changes. Like I’ve certainly not done, uh, like a Peter Thiel or a Barry or a SoftBank and like got completely out of like, major positions. But I have nudged my own portfolio around a little bit. Um, and so I’ve, I’ve got, I have got more risk off, but then you and I in like different stages as investors.
Like I live on my portfolio, right. If it’s, I, can’t live on the Patreon earnings just yet. So, um, I got, I got the bills to pay. So, uh, yeah, so I’ve, I’ve nudged my cash allocation up from [00:50:00] about 17 and a bit percent to over 21% with a couple of trades I’ve made in the last two weeks. Should I give you a quick whirlwind tour of what I’ve done?
Krys: Uh, say that last bit again. Batch.
Luke: Oh, sorry. Should I, should I give you a quick walkthrough of what I’ve done?
Krys: Oh yeah, absolutely.
Luke: Yeah, so, um, bunch of stuff like I’ve, I tweet about this stuff. So go check out like my ex at seven Luke Hallard, and you’ll see like a nice thread of every month, every mid month. I give like an update on what I own and the changes I’ve made in the portfolio. Um, maybe staying with the theme of like, these, the, like the hyperscalers and the big tech stuff. I only just added to my alphabet position back in May, but even that ad has like doubled, like my whole, the value of my alphabet position has doubled in the last six months. ’cause I think the market’s now waking up to some of the stuff I was saying years ago. Um, [00:51:00] but I have trimmed my alphabet position, but it’s not because believe in the future of the company. I just have too much exposure to it. So I’ve trimmed that down to about a 10% allocation. I’ve also, I said I wasn’t gonna trim Palantir again, but I have trimmed it again, so now it’s a 1% position. It probably if it just, I can, I could live on that. If it just keeps doubling and I keep like cutting in half, we can just do that for like 10 years. That pays the bills. Um, I’ve sold a bunch of stuff though, so I was trying to raise cash and I’ve, I’ve been looking for easy places to do that. And maybe like, linking back to something I said at the top of the today’s discussion, a cent really. There are a couple of companies I’m just not tracking effectively in my own portfolio. one was United Health. Um, how, but one that probably ties into this conversation is A SML, the, uh, the guys that make the machines, that make the semiconductors. [00:52:00] haven’t sold it ’cause I don’t believe in A SML, um, or because I’m a bear on ai, I’m, frankly, I’m just not tracking the company effectively.
Like I know I’m, I’m not doing like the bare minimum in my mind, which is enthusiastically and excitedly. Reading the quarterly report, listening to the quarterly earnings call, occasionally doing like an industry read across. I’m not doing that for SML.
Krys: So why not? Why not batch? Why? Uh, ’cause it’s a fascinating company.
Uh. it is. It just, it is, but like the, the stuff it’s doing doesn’t excite me. Like I know it, I know like the stuff it’s doing enables stuff that excites me.
Mm-hmm.
Luke: by, you know, what are doing and what Nvidia are doing with the machines that A SML help them build. maybe a SML I’m just finding it’s just like one set removed that I’m just not like, you know, eagerly like a geek [00:53:00] reading on my favorite like tech blogs and websites about like, the latest generation of hardware and what it can do. ’cause it’s like, it’s sort of somewhere back in the supply chain. It’s like I wouldn’t be interested in the guys that are actually like mining the raw materials. That doesn’t interest me at. like, you know, it’s incredibly important still.
I did one other change as well. I, um, I sold Snowflake, which I’ve owned for a couple of years. of the same reason, like I have not tracking it well, but I do actually have a foundational reason why I’ve exited this one. It’s been on my like to-do list to sell for some time. Um, like if AI plays out the way I see it playing out, I just don’t think we’re gonna need like the Snowflake data cloud. Um,
Krys: Hmm. sources of record. Companies will just need, you know, somewhere where they have, I dunno, a list of all their employees and their national [00:54:00] insurance numbers or, you know, their security numbers and like date of hiring and various other information. And if you have all that information in like a structured, some things somewhere, like a source of record.
Luke: Uh, you’ll then use AI do fancy reporting, draw inferences and analytics and like correlate random bits of data and come up with like business ideas. You don’t really need, like data warehousing and some of the stuff that Snowflake does. Uh, plus the real AI guys seem to be leaning more on Databricks, which is a private company, which is on my shopping list. So if I can buy Databricks, I will, but I just don’t feel like I should own Snowflake right now.
Krys: Yeah. Curious. Uh. I had a little more bullish take on Snowflake, but I had studied it pretty intensely some while back. Uh, and then though simultaneously it [00:55:00] became too complex to remain expert level enough to keep following it. Uh, I worry about any software that, you know, has AI at its center, as you know, as you heard me say many times.
So I think, uh, I think all things being equal, that’s a pretty fair position to cut from your end for the reasons you, you, you gave. No, no, you won’t hear me, uh, screeching at you for that one.
Luke: I did buy a couple of things. I bought Mercado Libre, I think I talked about that a little while ago, and you and I talked about Uber last week. I’ve actually now bought that twice already ’cause I wanted it in two different portfolios. So I’m not just selling, I’m buying a little bit, but. Kind of bringing it back to where we started, like net net, I’m increasing my cash allocation and I’m probably still gonna take like another percent or two out of Rocket Lab at some point. I’m just trying to hold off doing that for now.
Krys: Yeah, I mean, it’s huge. Uh, it’s a huge position for you. So yeah, that sounds wise.
Luke: So Chris [00:56:00] Christophe is risk on Lucas going slightly more risk off, but maybe something to read into this is like neither of us are making, well, I don’t wanna speak for you. I’m certainly not making like massive fundamental changes in the nature of my portfolio. I’m just like nudging things in a certain direction to match my kind of conviction and my thoughts about the medium term.
Krys: Right. And I’m trying to, it feels like what I’m trying to do is I’m sensing that this moment is one of these manufactured fear moments intended to scare people out. Uh, where, whereas the long-term trend and momentum is going to continue to be up and into the AI sector. And so I’m continuing to back and add to.
My positions in the, a AI dominated space, the batteries, the data [00:57:00] centers, the, uh, call it the makers of the plumbing, like sterile labs. Uh, and I’m, I’m guessing that a mo uh, I don’t know, a month from now, the, the, those things will actually be higher than they are now. So, because the AI training ain’t stopping,
I think that’s, yeah.
Yeah.
Luke: And you know, like we, we did the King of the Jungle Review last week, and you soundly like trounced me with your 380% return. if the AI bubble doesn’t burst, you are absolutely gonna win like year three. Well, notwithstanding what our Patreons do with their community portfolio decisions. Um, but yeah, you’re gonna, you’re gonna beat me because you are much more risk on with your portfolio and have much more exposure to some of these themes. I think in like a normal year when things aren’t going crazy. I feel like my portfolio is better positioned.
Krys: Yeah. Let’s see. Uh, let’s see how this shakes out. You [00:58:00] know, one, one of the things that, uh, you saw me doing maybe over the last month or two is I opened up a position in PayPal, and I’m kind of using that to think of as a bucket into which when I’m ready to sell some of the AI stuff. A lot of bananas are gonna flow into that because it’s hugely undervalued.
And you know, my thesis is, is that there’s already lots of signs that the growth is returning and so forth, and it’s completely unrelated to ai. So I have this space for, um, yeah, to catch all the bananas that are, that are, uh, out of the, the bubble, um, the AI bubble stuff. And that’s how I’m thinking of, of, you know, beating badger for round three, is that I’ll, uh, either the AI stuff continues, like you said, that would position me to, to have the better returns or, [00:59:00] and this is more of a timing thing that I’ll sniff out the bubble if it’s popping quick enough, let’s say, and reallocate those sources to a position I’m ready to, to become much bigger.
So, let’s see. Let’s see what happens.
Luke: cool. do this, these are times, I think I’ve said this in recent discussions, like when valuations are like they are right now and when volatility is like significantly higher than volatility, which is again, is right now, these are the times when you want to keep a steely eye on your portfolio and like a firm grip. I’m, I’m using tools like fiscal ai, like daily just to look at my portfolio, look. The valuations of the companies I’m in, certainly to be like checking in as they’re reporting, as you say, Wednesday, a big day coming up with Nvidia. Um, because you, you need to be reactive or you could reactive.
That’s the thing you don’t want to do. You need to be prepared [01:00:00] um, and you want to be able to respond, uh, if, if like finances start telling you that the game may have changed.
Krys: Exactly. No, I mean, that’s a decent investing principle. Be pr, you know, just be prepared, uh, and try to take advantage of things. I, I made a ex post it. It wasn’t, I didn’t spend too long on it, but it seemed obvious. And sometimes the obvious needs to be repeated, which is, uh, that people confuse price and value, and when things are going down, they start panicking.
But when the value remains obvious, then when the price goes down, you’re getting value. I mean, you’re buying a company at a better value, and that volatility in that way is your friend. This is what so many people don’t get right, because they only focus on price. But when you could see clearly that the value of your company has just increased, right?
Because say [01:01:00] eos, just to use my, old, my, battering ram, when, there is no world that I know of, where they will not sell all the batteries, that’s becoming more and more clear where they’re saying, we’re ready to scale our lines quick, more, and more quickly. And simultaneously the price drops, you know, last week, 40% or something, uh, my guess is due to market manipulation shenanigans, then that’s not a moment to be fearful.
That’s a moment to say, oh yeah, three years from now, oh, the me, the me of three years from now is gonna be really proud of the me of today. That was able to see that so clearly. And, um, unless, right, a black swamp thing happens in which all of a sudden the US grid explodes and AI drops dead in its tracks and China takes over.
So, uh, you know, like, [01:02:00] okay, well then we have other problems then.
Luke: sure. Alright, very good. Hey, good. If you’re not, if you’re not following us on the X’s, go check out Christophe’s X. He does post like some Mimi stuff and some wisdom. He is at seven Flying Platypus.
Krys: Yeah. Uh, I, I, I post some Mimi stuff sometimes, and every once in a while there’s a, there’s a kernel of wisdom coming through. You know what, I’ve been posting about badge, uh, recently. This is my latest kind of, uh, ah, obsession. Might be too, too strong a word, but I’ve now spent. I dunno, 30 hours researching ticker GNS Genius Group, uh, I’m assuming badge you, you haven’t heard of or haven’t explored this phenomena, have you?
Luke: Nope. No idea.[01:03:00]
Krys: Uh, this is, this is to me, GameStop two. It’s the same underlying factors. There’s a company, uh, that, well from the, from the stock side, the bet here is simply that, uh, let’s call it buyers or retail, are going to bid up the shares because they believe what the company stands for rather than say the business itself.
And what the company Genius Group stands for is what the original GameStop Saga stood for. On at the end of the market trading day, uh, I’m sorry, on Friday, genius Group filed an actual lawsuit against Citadel Securities and Virtue Americas, which are two large market makers in the us and they have been gathering data [01:04:00] for over three years that they claim in this long 35 page filing.
Absolutely categorically proves that these market makers were one spoofing, uh, GNS shares, meaning they’re faking orders and canceling instantly to kind of psych out the direction where the stock’s gonna go. And this way, basically cheating and robbing retail investors, uh, they claim they have categorical proof that these institutions were using systematic naked shorting, which is in violation of the law.
Uh. And essentially, I mean, I mean this is literally illegal under the law, flat out manipulation, and they’re saying they have enough, yeah, they have enough data to, to take this to court. They hired the biggest bigwig lawyer in all of this West Christian. Uh, they said they’re [01:05:00] ready to fight this with, uh, massive buybacks and, um, selling their Bitcoin.
And they’re, you know, they’re basically ready to go to war. Uh, over this. I’ve been found this stuff, now this for over two months, I added a tiny position in the king of the jungle for kind of as you might say, the lulls. But, you know, because, uh, I remember the game during GameStop days. To me it was absolutely fascinating because it ends up being not just about learning how the market actually functions and all the.
Uh, behind the curtain shenanigans, but it reach reaches a whole nother level of, you know, the little guy versus the big guys. And why do the big guys always win? And when they, you could prove factually that they broke the law, who’s gonna regulate that? And are we in sort of just a moment of time where it doesn’t matter if you’re breaking the law because you could do whatever you want?
And that kind of legitimate [01:06:00] populist anger that arises in moments like this to me is important. Uh, I don’t know, maybe, maybe I’m a sucker for this kind of story where I want the little guy, you know, to win sometimes. And now you have this, this company saying, okay, we’re fighting and we’re fighting in the open.
We’re named, you know, we have the paperwork, so let’s go. Um, there’s a lot more to it. My God. There’s a lot more to it. It’s really, really complicated. So I posted on our Patreon. Some links and some accounts to follow, to get caught up with this, uh, I dunno, badge. I’ll pause there to s see if there’s something that you wanna mention.
Uh, you haven’t, you haven’t talked there about like who genius group are and what they do, but you know, maybe that’s like secondary to this, uh, legal battle. So if you are, you know, if you are owning stocks so you can feel like you’re part of like the resistance, the, uh, the one battle after another crew and, uh, yeah, go for [01:07:00] it.
yeah, yeah. Uh, in this case, so GNS is a, is a small, small market cap company. It’s kind of a Bitcoin treasury and an education company, and they have these conferences and Bali and building Bitcoin cities. And from an investment standpoint, I really don’t think there’s much there. I would never in a million years touch this thing as an investment per se.
But simultaneously, I really like the CEO. I think he’s the, a guy that’s legitimately trying to fight, uh, a, a case for his company because he has all the evidence he needs that his company has suffered massive losses over a period of three years because the hedge funds decided they’re gonna target this little Bitcoin company and drove it into the ground, breaking the law to do so.
So I like the CEO and, uh, y uh, maybe sec, maybe second tangent to this, you know, [01:08:00] um, you talked about this, I think at some point regarding Robinhood, there’s the things that are illegal, the spoofing and the naked short selling, creating shares out of thin air just to drive the PRI price down. And then when you’re asked to give those shares back, you don’t, because the law, you know, because there’s nobody to slap your wrist.
So literally, you know. Making the price, do whatever you want and suffering no penalty. So there’s that side of it, but then there’s all this stuff about PFOF, uh, which is, uh, you know, payment, um, what is it? Payment flow order
got, yeah. Paying for order flow, where you kind of have the sense where, uh, Robinhood, the way I understand it, the way I think of it is Robinhood is in bed with some of these larger market brokers.
They pay Robinhood to basically direct retail orders to [01:09:00] them. So it’s kind of like sliding them, you know, of uh, some, some cash under the table. The retail investor doesn’t know. And the retail investor thinks that they’re always getting the best possible price on the market, but in reality, they’re sometimes getting a good price.
But sometimes the, the. Call it the briber market maker because they’re getting the cut from Robinhood. They’re actually taking a little skimming off the top between the bid and ask price, and that leads that. That’s not technically illegal. It’s, uh, but I think it’s one of these market structures that is behind the shadows and, and it’s a conflict of interest, right?
How else can you say it? You know, when somebody’s taking kind of a bribe and saying, at the same time, we will always act in your best interest, not, not the person who, who we’re taking money from. You kind of [01:10:00] stop and think, like, really? I doubt that. And so, so people are getting, are getting, um, they’re being lied to in a sense.
And I, and it’s one of those things like Robin Hood says, you know, uh, all trades are free. And that is true, but when all trades are free and they’re making money. Who’s the product? You’re the product, right?
And telling you all this stuff when you just told me you had all your accounts on Robinhood rather than what I would term a proper broker, but there we go.
yeah, well see. This is where it gets messy. I do, it’s, it’s, I wish the world were so black, you know, black and white. Where was it? Easy to, to, to say proper broker, but now, mind you, so great example, badge. I’m glad
you
said that. I, I like
using, I like, in? Chris? I got, I’ve I’ve, I’ve got a hard stop in like a few minutes ’cause I’ve got my charity meeting.
okay. Right. Okay. So, um, I’ll land this by saying, sure. You could say get a proper broker monkey, but guess who [01:11:00] took away the buy button from GNS over the weekend? Charles Schwab and Fidelity. Um, you know, ib, I, I don’t know where IBRK is in all this. Probably not looking good either. So in the vast world of these market makers and the manipulation, I, I, I think, I think it’s all kind of.
Skeezy and it’s a US centered problem, and I love that GNS has taken the fight to these guys. So if you wanna, so my recommendation is watch dumb money again and, um, throw some coin at GNS and maybe, you know, it’ll have a GameStop moment and, uh, we’ll see what happens.
Luke: Alright, very good. So, so in your mind, like in the Citadel boardroom, they’re like, they’re saying like, hail Santa and they’re like, they’re gunning for these little guys.
Krys: Yeah. Well now, I mean, this is now I believe, the first time where it’s like everything’s in public. The documents are gonna be by everyone. The journalists are gonna, you know, like [01:12:00] I, I’m, I’m sensing a kind of round two Yeah. Where, where all the names of plaintiffs are and the data that they’ve been collecting will be actually presented and incontrovertible.
So let’s
see.
Luke: stuff. Good luck. Good luck in your joining the fight.
Krys: Thanks. I’m excited. Get the pitch. Monkey’s got his pitchforks. I.
Luke: uh, alright. We got, we gotta round it out ’cause I do have a hard stop for, uh, a, some other stuff I’m doing. But I do want to give a quick apology to all of our listeners, but particularly, uh, 18 Beers Shy Schneider and Murderman 1556. we had some weird audio ghosts in the machine in last week’s episode and apparently like ghosts are saying like hotdog and other random stuff as the episode plays, so apologies if you caught that. We think we’ve nailed the audio issues ’cause we’ve just migrated to a different recording [01:13:00] platform and I think I may have screwed up a common settings. So hopefully we don’t have like ghostly hot dogs in this week’s episode.
Krys: Yeah, I, I don’t buy, I, I don’t buy your innocence here badge. I think you’re subtly trying to, to infiltrate monkeys, anti Greg’s sludge, sausage rolls. And you’re, you’re just, this is some, some weird PSYOPs, subliminal, uh, business. You’re, you’re trying to pull badge. I don’t like it. I’m with the, I’m with the crowd.
Uh, get this man audited.
Luke: Totally unintentional. Um, before we wrap, also though, I think when you guys hear this episode, we will be almost into Black Friday and a couple of partners of the show we want to call out in particular, um, our partners@fiscal.ai have an incredible deal. They only provide discounts like no more than twice a year. And um, this is one of them going into Black Friday. You normally get a 15% discount, [01:14:00] you’ll be able to get a 30% discount on all your paid plans if you sign up to fiscal.ai/wildlife. That will be doing us a little bit of a favor. Um, yeah, so go get your big discount. And then another tool I want to call out too, that I’m a fan of, I know you don’t use these guys. I’m a fan of Port Sidedo. . Um, same Black Friday. Our friends at Port Sidedo are doing a 40% discount if you sign up during their Black Friday period for your first three months. So get 40% off of a paid plan with Port Sidedo. Get 30% off of a paid plan for life with fiscal.ai. Um, these are tools that Christophe and I both use fiscal ai, I use Port Sidedo. Um, they’re really essential parts of my investing toolkit.
Krys: Yeah, if you’re a serious investor at this point in 2025, you are using fiscal ai. So you have one question. Are you serious investor? Are you ready to, you [01:15:00] know, step your game up. Uh, with us as your guides. And if the answer is yes, you’re getting yourself to fiscal ai, I mean, it’s not that more, uh, that it’s not that complicated.
Luke: Christophe Christophe. uh, are you ready to be a beast of an investor?
Krys: I was born ready Badge.
Luke: Steal yourselves. Let’s steal our portfolios and I. stay ready through whatever this cycle throws us. Until next time,
