Welcome back to another episode of the Meet Kevin show. Today we have the honor of confronting Ross Gerber on his thoughts on what's going on with the Federal Reserve the economy, real estate, housing market, and of course what's going on with paper handing, test lights just two days away from Tesla Investor day we've got so much to talk about Ross Welcome aboard! Thank you so much for being here. introduce yourself to everyone and then I got to ask you about the Fed Well hello good to see you again Kevin And glad to catch you on a day off of flying and checking out real estate. Um I'm Ross Gerber and I am the guest today on the Meet Kevin show and uh, I'm an investor I run the Gerber Kawasaki GK ETF as well as our firm Gerber Kawasaki where we help people manage their financial plans, build their better Financial Futures Along with GK Tax and Accounting are new very popular division which has been swamped with people.

We're doing tax and accounting. We're making tax and accounting fun and less stressful for people. So if you want to get your taxes done in an affordable and tech savvy way, GK Tax Accounting is doing phenomenally well as well. So um, we manage lots of financial services businesses and help our clients reach their financial goals, lower their taxes, and ultimately, you know, have a better life.

That's what. So all right. Just just be clear about that. so people can go to you and you're a licensed financial advisor and your team can help them do their taxes.

uh, their investing. Whether they're investing into you know, like ETFs or or bonds or whatever and you can basically just manage it all for them. Yeah, and and I Think the idea is that most people assume that the goal is to like, find the next Tesla put money in it, get rich, and retire. It's actually not that, because that's a lot more like gambling than actually investing.

It's really about building a financial plan. That's what we really do at Gerber Kawasaki The investment return portion is a big part of it too, but it doesn't matter if you don't have like Financial Security if you're not using your IRA and 401K right? and you're paying too much in taxes if you're not taking advantage of tax advantages. For example, that ETFs have you know, like there's just like a ton of mutual funds paying distributions in a down year. So you end up paying taxes and lost money? It could only happen in a mutual fund.

doesn't happen in ETFs Um, so it's like there's many ways that you can manage your finances to get better rates of return that have nothing to do with investing. like paying less taxes gets you a higher rate of return. Avoiding a lot of turnover and costs with investing saves you money, it gives you better rates of return, and so we really help people plan for their future. For example, you know, playing for college? you have some young kids and You know, when you start thinking about college costing 600 000 dollars per kid and it's like there's a savings plan for this that's very effective.

The 529 plan are you taking advantage of this? So we sit down with people and we really like help map out a strategy to reach your goals and then a savings plan to help you reach your longer term financial goals. And it can be helping you buy your primary residence, buy your first home. Um, it can be helping you with your trust and state helping you with your parents. With older parents, it's super hard and making sure they're taken care of.

and there are states taking care of. So there's a lot to financial planning and investing and that's what we do at Gerber Kawasaki and I think it's what we do. That's unique is that we work with people at all stages of the wealth accumulation process. Most firms like mine only work with you once you're rich and you're older and they're like, oh, now that you have 5 million, come work with us.

What we do at Gerber Kawasaki is we'll start with you when you're 23 and you have your first job and we'll make sure you're saving in the right place in your 401k and your IRA make sure that you're making great career decisions and investments in yourself, especially when you're young. But we have a get Invested program for new investors all the way to wealth building which is for young people who have some money who are now starting to really accumulate assets. Then we have wealth management for people who now have some assets maybe like Gen X people like my age and then we have high net worth for people who are now older who or or business owners who have maybe sold their business who now have five million or above. So we have a plan for those people too.

But our firm helps you in all stages and that's I Think that's unique. So what I've done is I've gone ahead and linked that down below and I have to know because it sounds like while you help people come up with financial plans, it seems like the FED has their own plan. What's going on? Are they trying to ruin this market and and then just buy the dip themselves Or what are they doing? Are we going to six percent? Are they lying to us and just feeding out to us like really slowly like boiling? The Frog You know, are we going to seven percent What's going on here? Well, the boiling. the Frog It kind of feels like what they're doing.

Um, no. I Don't think the FED knows what they're doing and so they keep moving goal posts as as they're they're wrong constantly. You know? So you know what they thought a year ago when inflation was going to be, they've been wrong what they thought six months ago would have been enough. They've been wrong.

and and not to say that their job is easy. Like we can't really predict the future very easily or nobody really can. but I think it's the idea of what caused inflation? Okay, what are the causes of it? Are those things still happening? And is Raising interest rates the appropriate solution for resolving the problems with inflation? Because raising interest rates is only one tool in the overall economy, and when you look at where that tool works, it only works in a section of the economy. And we're seeing the limitations of this tool now because what they've really done is they've made it more expensive to buy a car or to buy a house, or for a business to finance.

If you're a small business owner, you're screwed right now. Okay, because you can't get a loan from A bank for less than 10 percent. So who are they slowing the economy right? And and it's basically they're slowing the economy on people who. it really doesn't affect the economy as much.

Now people still want to buy a house and they're still buying houses. Home sales are at Lowe's but we haven't seen a huge decrease in pricing yet because there's so little supply of houses. so raising interest rates just slows down how many sales there are? Okay, fine, but people still need to buy houses and so it just makes it harder for people. their cost of living goes up.

They can't afford to buy the house right? so they don't buy the house and then real estate starts to go down. But it doesn't change if I go to a restaurant and there's servers who need to be hired to work there. and those servers were making twelve dollars an hour and now they're making 14 an hour. Which still is not a lot of money.

but this is good to see people who make 12 an hour like at Home Depot got a raise to 14 an hour. This is great news and the FED should not be worried about this at all. This is good. You want an economy that brings everybody up and we finally have an economy where people who are in lower income jobs are making more money and Jay Powell is like we can't have that.

We can't have that at all. So 60 why do you think that is? I Mean it seems like there's this fear of this wage price spiral that oh, you know, if people get paid more, they're going to, you know, uh, essentially have more money to spend which will lead companies that realize they have higher costs to raise prices. But it also seems like you know if the median wage in the United States is 32 dollars an hour. Right now, it seems like most of the people are actually getting paid more are the ones making 12 14, 18? 20 bucks an hour should not really just be bringing down the average wage anyway.

I mean the tech ones? You know, the wealthier ones? They're the ones who seem to be getting laid off. What's the FED worried about? Like yeah, let poor people make some more money, man, right? But you're talking about there's like millions of people who make 12 13, 15 an hour and there's a lot less people who make 250 000 and lose their job and can get another job for 200 000. you know what I'm saying. So we're seeing all the layoffs and a lot of job loss among middle and high income workers in certain industries, but among the healthcare industry Hospitality Restaurants the core Services Most of these people have been underpaid for a generation, you know.

and and now for the first time you know it's like we can actually have real wage gains if I work at Walmart real wage gains if I work at Home Depot or McDonald's and and it's a really positive thing for the economy to have this because it brings up everybody and then these people spend more money and it doesn't mean that prices for goods has to go up that much. It it doesn't mean this at all. So the inference that the price of eggs has anything to do with whether somebody at Walmart gets a raise. there is no correlation because the egg prices have gone up because of the avian flu, not because of demand for eggs is off the charts.

You know, like somebody in my office was like oh, I went to Costco and food inflation is real, you know? and I was like, yeah, food got more expensive. You know, Ukraine was one of the biggest producers of food in the world and when the war started, it cut off a huge supply of food for the world and it's made food more expensive. but the FED has nothing to do with that. That's the war if you want food prices to go down.

and the war. It's really simple. So if we send Ukraine a bunch of tanks and we just kick the hell out of Russia right now, the sooner food prices will come down has nothing to do with Jay Powell Okay, there's nothing he can do. Okay, so a war breaks out, an oil prices surge.

Okay, and look at what happened. All the economies in the world adjusted and there was enough oil and gas that turned out that we don't need Russian oil and gas. Europe actually now has plenty of oil and gas prices have dropped and oil and gas and it turns out we don't need Russian oil and gas that bad. but Jay Powell had nothing to do with that.

That's the world. Economy is making adjustments to a spike in energy price which created a huge profit for you know who. U.S Oil companies. So U.S Oil companies had record profits Like ridiculous levels of profits.

Why? Because of the war in Ukraine Jay Powell has nothing to do with this. So here's Jay Powell in the corner with his little Hammer trying to slow down inflation that he has no control over by jacking up rates on everybody. Okay, and basically like screw in the stock market, screwing small businesses, screwing homeowners. You know, anybody who borrows essentially gets screwed, which is most people.

but he's raising the cost on us to offset the fact that eggs cost more because a lot of chickens are dying. Okay, it doesn't make any sense. So what the FED needs to do is stop raising rates and let the economy work. Because in a real competitive economy, prices go down naturally.

because companies compete to have the lowest prices like Tesla They lower their price so that their competitors are now like, oh, great. You can buy a Tesla for a really good price right now. and what do you think? People went out and did? They went out and bought Teslas But prices went down for cars over the last year. Prices for houses are going down.

Prices on rent going down over the last year. So we're seeing all these prices receding because of the fat. anyways. So the FED got what they wanted, but it's never good enough.

It's just never good enough. Why? Because people's earnings are still too good. So their solution is, how do we get more people fired? How do we hurt the U.S Economy so that you know? Mary Who works at Kentucky Fried Chicken Won't ask for a race? You know? Do you think that the Fed's going to keep hiking until the unemployment rate reaches a certain level like six percent. Five Seven percent Would they? They haven't? They have.

See, they use these terminologies so they don't just say until we get enough poor people fired so that they have no wage power that will just keep raising rates. But see, it doesn't change underlying demand for Kentucky Fried Chicken You know. So we still need Mary working at Kentucky Fried Chicken and we still got to pay her what people are getting paid because we need her and there's a lack of people still in the employment. Arena And there's a very specific reason for that and it's called horrible Immigration policies.

So in America we used to have lots of immigrants that would take these jobs. It was very easy to find somebody to work at. Kentucky Fried Chicken Five years ago, you know, before Trump, it was. There was plenty of immigration before Trump.

Now Biden's been no better. So I'm not saying this on a partisan level. The immigration policies in this country under Trump and Biden have been equally as horrible. Yeah, But what we've done is we've cut millions of people out of potential jobs that could have filled these jobs and lowered wage pressure.

So wage pressure can be lowered extremely easily by simply letting in a million people into this country. And they'll pay taxes and they're coming from countries all over the world and they can go work in Kentucky Fried Chicken and then Mary won't have as much power saying I need a two dollar raise for me to work because there's some other guy that will take the job for for the same amount of money that she's getting paid. So is that fair though than to Americans that you know they should earn less or have lots of jobs for immigrants coming over. I mean it sounds like it's good for inflation if we have immigration.

I'm an immigrant. so I you know I mean generally I'm a big fan of bringing more people over who are willing to work and and not just not need to be on. Wealthy Nine percent of Americans are immigrants. Our system is immigration.

The only people that were here were Native Americans Okay, in 1600 they were immigrants that came from England or whatever and they landed. Remember Thanksgiving When the Indian Native Americans thought we would be nice and they welcomed us and showed us how to make food because we were scared to get off the boats because we were dying. Well that was a mistake wasn't it? They should have just said no thank you but instead so our countries, the country of immigrants. That's what the Statue of Liberty actually says.

Bring us your tired and you're hungry and your messed up people. So my relatives came over. you know, 100 years ago from Ukraine from the same Russians trying to kill us and we left. We came over 100 years ago.

It's amazing. Um, we come to America We get jobs, we pay taxes and we build families and that's what this country is all about. So to say, now that I'm in America I don't want any more immigrants coming in so I can protect my job and my wages is un-American Hmm, that's a really good point. Uh, it kind of makes sense.

if you go back and look at history, it's like and then even you know us. Basically historically Here it's like hey, look, we're all immigrants. Okay, so what's your take? Then on, uh, on on, uh, some of basically the corporate stimulus we're seeing now going into the energy sector. Whether that's like chargers for EVS or chips getting massive stimulus.

I Mean it seems like on one hand, the FED is struggling to try to control inflation and we're having these debates over labor and and wage price spirals. Yet now here you've got essentially the government still printing money. except now instead of sending stimulus checks to people, they're sending them to. You know Green Climate change policies, which you know in the long run are probably great, but but in the short term, aren't they adding fuel to the fire? Kevin You're a hundred percent on this.

Who's causing inflation? The government causes inflation. Okay, it's not that complicated. You hit it right on the nose. Okay So oh, Jay Powell you got to lose your job at Kentucky Fried Chicken Because the government keeps printing money.

Whether they give it directly to people, or they give it to a company, or whether they give it an incentive, The issue is they're printing money we don't have. That's what inflation is. It's too many dollars chasing the same Goods or too few goods. Okay, so think about how we got this: inflation.

It was 2021 Biden comes into office, he passes a 1.9 trillion dollar stimulus bill when there was no need. So when you looked at the deficit, So one way to look about inflation is the way I look about inflation. Inflation is the amount of extra money we print every year than what we had the year before. So currently we have 32 trillion dollars of debt.

Okay, that our country has and we run a deficit. Let's say for round numbers over the last 12 months, it's a trillion dollar deficit. Okay, it's been as high as 2 trillion under Trump. But a trillion dollar deficit on 32 trillion dollars of debt means we add another trillion.

So we'll have a 33 trillion dollar debt in a year. So 1 trillion on 30 trillion in implies like a three percent increase. Okay, in the debt. That's the inflation rate.

How much more money has been printed? Now where that extra printed money goes varies right? It can go to entitlements like Social Security and go to the military. It can go to the IRA. It can go to Tesla through 7 500. You know how many 7 500 checks are they writing right now for people buying? Teslas Now you can argue.

Oh, this is good. Oh, this is bad. but Tesla is subsidized by the US government. There's no question about it, along with all the EV players, solar players and I think that's a great thing.

It's a great wonderful idea, except that they're running it with deficits. Okay, so if the government has two trillion dollars of deficits, then our inflation rates like over six percent. You see what I'm saying. So if you go back to Covid, we printed trillions of dollars over 10.

15 more money than we had over a couple years. and now that showed up in the numbers once. people were able to go spend that money. But when we were locked up, people just saved it all.

So you're like, oh, the economy wasn't overheating when we were all locked in jail. but once we got free, everybody had all this. 10 15 more money and they started spending it and we got 10 to 15 percent more inflation And that's where we're at right now. Okay, so we got the inflation that we printed.

So now if you want to beat inflation, I can tell you how to beat inflation right now. Cut the deficit, Cut the deficit. So if the government had zero deficit this year, we would have no inflation. But what would happen? They would have to take a trillion dollars out of the economy that they're spending right that of money they don't have and that would slow the economy for sure, right? In a way that the FED can't.

In fact, I would imagine that would be pretty politically unpopular. It might solve inflation, But then you get, who are they going to cut? Who gets cut? Trillion dollars Got to get cut. Who are you going to cut? So you only have three sections of the government. You got military defense that's not going to get cut.

We're in a war. Okay, we're not cutting military defense. Then you've got entitlements which is Medicare and uh, and Social Security And that's what the Republicans are talking about. And that's actually kind of a smart thing to talk about because we can't afford it.

But when everybody in the government's old, they don't have any desire to take anything away from old people, even if it benefits young people. So if you notice Biden who's 80, if you say I'm going to cut Social Security To save money, he attacks full-fledged because he knows that old people control the polls. When you go to a polling station, when you I mean go to vote Who who's controlling the the polls? It's old people. Old people control our country.

Look at our Congress our Congress is like a hundred years old Dianne Feinstein 127 years old finally decided not to run 127. so she tried to walk. oh sorry I know they're like she like blinked twice when they knew she didn't want to run anymore. but like I I'm joking but like it's true and so like nobody wants to cut Social Security The simplest way we can save our country right now is say sorry old people, you can't collect Social Security till you're 70.

Now Wow for me my Social Security age is 70. Okay because it moves up over the next decade from 67 to 70. So when I reach full retirement age, it's when I'm 70. But if you're old today, you can reach retirement age at 67.

So why not just change it to 70? Right now, life expectancy is not going up anymore, so who cares? Okay, so it doesn't seem like though, that even if even if that would be a solution, that it would happen. So do you think there's a risk we might not extend the debt ceiling, which could be politically calamitous. financially. This is like this debt ceiling thing is the dumbest thing ever.

Okay, well think about it. It's like it's like saying like we owe the world 30 trillion dollars and we're going to borrow another trillion every year for as long as we can imagine. but we might not pay it Now This is a really bad idea for a country that's borrowed 30 trillion dollars since the Vietnam War in my lifetime. Basically, the there was no debt in 1967.

Okay, there was no government debt in 1967. it started in the late 60s under Nixon We got off the gold standard because we couldn't pay our bills for Vietnam and he printed tons of money and we had horrible inflation. That was the 70s. Okay, and from that period of time we've racked up 30 trillion dollars in debt and now they're saying because of some political jockeying.

Oh, we might not pay it. It's absurd. It's absurd. It's stupid for both sides.

Now, what the Republicans are saying, which I think is wise is that you know Democrats got to cut back on spending. So let's talk about spending and we'll We'll do this so they're using the only leverage they have to try to get by and talk about spending. But that's not a bad thing. We've got to cut spending somewhere.

we can't continue to spend trillions of dollars more than we make every year. It's just it's it doesn't work. So when you're talking about inflation, the best way we can cut inflation is by have the government spend less. And if the government government spends less and we raise the debt ceiling that will help with inflation substantially, that's the solution.

Has nothing to do with what? So Powell could stop Now Powell could stop at five percent. Pal can try to force the entire housing market into a massive decline, huge imbalances in the economy, and huge debts that the U.S can't pay because nobody's talking about the fact that the U.S can't afford five percent interest on 30 trillion dollars. Does anybody think about this? That's 1.5 trillion in interest a year. We're paying 350 billion.

Currently, you know Biden's budget factors in like 400 billion for interest this year and I'm like, what fantasy is he living on With rates of five percent? you know, every month that goes by more of our debt refinances from zero percent to five percent every month that goes by. and it's burdening us to pay this interest into the future which causes even bigger deficits. And then you get this debt cycle of bigger and bigger deficits, higher higher rates because nobody will lend us money. Oh my.

God What is the Fed doing? So how how do you, uh, align this as an investor? So obviously you know your point of view is the Feds should stop as soon as possible with raising rates, because not only is it making it more expensive for us, but it's not actually helping with inflation. What would help with inflation would be if the government just stopped spending money. Ridiculously so. How does an investor position themselves right now? I Mean what do you do? Do you Just you know, sit in cash.

You just buy T-bills What do you do sitting in cash? Just get five percent, You get five percent. So if the basic premise that inflation should average two to three percent over the long term and the government guaranteed will just give me five percent, why do I need to do anything for it right and just let the government pay me? Isn't that what we do at House? Hack? We just let the government yes Bonds mature every month they mature and I buy them at even higher rates than we bought the first group I Never thought at four and a half percent now I bought the recent ones I just bought were at five I got us five percent on the last. Bunch we get five percent. So think about that.

You have 20 million dollars at five percent. makes you a million dollars a year. Why do I need to work? Why do I need to try? Let the FED pay me. So a lot of the money that we have right now is going into bonds and going into short-term treasury bonds because even corporate bonds are yielding the same.

So it's really weird because basically like, like corporations and other debt unless it's risky. Basically now trades the same as governments because everybody knows over the long term the FED can't keep up these rates this high. But like on the short term, people still know like Disney's in good shape and Apple's in good shape. So like, why should they be paying eight percent and they're not.

So they've created this weird thing where it's even more advantageous to buy government securities than corporate Securities because the spread solo right looking at high yields. Maybe they pay eight and unless you take like real risk, that's just the risk reward isn't there. So I just buy treasuries. So why would I buy a stock? Well look at it this way, when interest rates change and go back down, there's going to be so much money that will be looking for a home and they will end up in equities one day.

So like if you think about the pent-up demand for equities and and now people are getting five percent on money that should be going into equities and creating jobs and Innovation and instead it's sitting in the government. when rates go back down, all that money flows back into the stock market. Okay so it's like this big tsunami of cash that's Happy hiding because the FED is overpaying you not to take risk so the fed you can see it. Like when rates go up, stocks just kind of go down.

It's just like that's just the relationship because it's a PE to interest rate relationship. so the higher rates go, the lower PE goes. But if you look at earnings, they're not looking so great, right? Earnings were down like five percent in Q1 and that ultimately drives stock prices is earnings. So we've got to get earnings going back up.

If we really want the stock market to go back up because it is trading at 18 times earnings, which is where it should be. So how does stock earnings go back up? that's the question. What do you think the weakest sectors are? Or maybe the not just the weakest ones, but maybe the best? What? What Are going to be the most resilient over this next year If we are going to see that earnings recession so to speak. Well, it's interesting too, because remember, we have a really lopsided economy where companies like Amazon are so massive relating to every other retailer involved that if Amazon has a bad quarter, it makes it look like everybody in retailing has had a bad quarter Because right, they're waiting on earnings is so high like Apple Google.

So what I think we're seeing is the beginning of this massive shift away from Big Cap Tech into small mid-side company because Big Cap Tech Microsoft and Apple discluded in this discussion to some degree, especially Microsoft which is doing a lot of great things, but like they can only make money if they cut employees. So what we're going to see is this continuing layoff cycle in the tech sector, so like it's way over bloated the whole tax sector. So so during Covid they they did really well and everybody bought PCS and and right now everybody's still happy with their PCS and whatever so they haven't bought new PCS And because of that it's put pressure on the entire tech industry right? So it was great during Covid. Now it's postcode, but everybody's going to Vegas So it's like it's not that iPads are all of a sudden going to be bad, but it's like my need to replace the iPad might be a year or two away, you know.

And so for these companies make more money, they just need to get lean and start demanding results and Innovation from their people. And we're starting to see that across the whole tech industry. So it's going to be harder for Salesforce to make money. It's going to be harder for all these big cap techs to make money because they're going to have to lay off people and get competitive again.

Okay, and then you look at the small maycat companies that are Scrappy and growing and doing all kinds of stuff and also in real life companies I Call companies where you actually physically do stuff like the casinos that were invested in. you know, like solar. You know where people are putting solar on houses. The numbers are are good.

You know these are growing businesses with growing earnings. you know, and you see it in the earnings reports. Some companies are reporting great earnings no issues, and a lot of the companies are not. But when you look at who's not, they're typically the big cap.

You know the Boeings, uh, you know even Berkshire had lower earnings. You know? so you're just seeing I think I think it's a great time for small mid-sized companies to take share against the cap competitors. So would you say then that the bear fears of hey, look, we're going to go through this earnings recession is maybe more of a just pick where you want to be or would you cite a little bit? uh, you know I mean how would you compare yourself to those bears that are saying just get out completely and just let the cards fall where they may and then get back in? Well if you read Warren Buffett's letter which I do every year he's been investing now 80 years and he's like it's a third of the amount of time America's been alive and it's never been a good time to bet against. America Okay, it's simple as that.

Nobody can predict the future I can't tell you what's going to happen this year obviously I wish I could, but I have no idea I don't know if the war is going to end or not I don't know if the Fed's going to just keep raising interest rates until somebody finally tells them to stop I don't know and that's not what we do. what Warren Buffett does and what we do is it's very similar is we're trying to invest in great businesses. If we invest in a great business over time and we buy it at the right price, it works out pretty well. So I think the question is is does it make sense valuation wise to invest in Securities And that's where it gets interesting because valuations aren't that high, valuations are pretty low, and expectations are low.

So the question is companies like MP that beat earnings by a ton? We own this. It's a Rare Earth company. We own it in the ETF and and they like earnings estimates were just wrong. by like a substantial amount.

the stock starts rallying because basically earnings estimates were just wrong by a substantial amount and they just made more money than what people thought. So I think when you have low expectations and low PES there's more opportunity for upside surprise. So that's good about the market. right now.

the market is not exuberant. Okay, the market is quite I Think sad, you know. So it's like low valuations, low expectations. Nobody expects earnings growth.

So the question is what companies are gonna surprise Like what? who are? who's going to do really well and I think I think if you look at where the money is being spent, it's people want to go out. they're traveling It's Entertainment Uh. Airlines are doing well. Hotels, gaming um movies.

People are back in the theaters. Um people going to Disneyland Um, people are going to restaurants. Um I think is it too early for chips? You think No In fact, you know I was just looking at your fund and you own a bunch of the same stocks we own. Um, the chip business is a great business to be in because it's being subsidized right now.

and if you look at what Intel said is basically we're cutting our dividend because it's so high and we need to invest in our business if we're going to grow. And there's this opportunity because if we build factories, the government's going to give us money so we're going to cut our dividend. We're going to put it into growth and what it entailed you. They bought five percent of Asml, Intel owns five percent of Asml and I was like that's so smart because yeah, they're going to spend 100 billion dollars on building stuff and who do you think supplies them with the most advanced and I saw that was added to your portfolio and it's been in my portfolio and I'm like dude, how does Asml lose Great management, great business, so on and so forth.

and so it's like when you start thinking about like this chip Act is going to create a huge amount of profits now. We also own an ETF ON Semiconductor and Nvidia is a top holding and always has been and I think you own AMD which is also a very good company. and so yeah, I'll have to just copy you on on and put that one in too. Well, you know it's a good stock.

I'm kidding. Okay, I'm not gonna copy it. No, it's okay. we own similar stocks.

That's not a bad thing, it's that's it. We call it what confirmation bias. We feel better we're on the same stocks. Uh, and then we can both be wrong together.

except you own like very few stocks so you know it's a little bit more volatile. Um, I'll be really wrong or really right. Good and bad. You know we have to own more stocks because we got to smooth out the path.

but um, but but that said, I think ships are in a wonderful position to be in globally and we've had chip shortages remember for a long time. So yeah, you know, like on semiconductors. very involved with the electric vehicle business charging business. You know they make chips that are very good with high energy use.

Um, and like if you look at their business, it's like kind of perfect for exactly what's happening in the world right now with electrification and and ships. Drive Everything you know like AI has been the Big Talk lately and Nvidia has always been. you know ahead in AI. But it's not just AI You know that they're really good at it's gaming.

crypto, autonomous driving for example. Um, and so like the core of all future, everything is in chips and we're trying to bring the supply chain home. and we're trying to, you know, not let China dominate these crucial Industries any longer. So that's wonderful for chip companies and suppliers, but bad for inflation.

Now would you say that? Uh, since we're talking about electrification, do you think people are finally getting over range anxiety? And I'm asking that because anecdotally, uh, someone in my family just bought a Toyota RAV4 for 68 000 and I'm like, well, first of all, you missed out. It should have been 69. But okay, that aside, why would they spend 68 000 on a RAV4 when they could have gotten a model Y for like Fifty four thousand dollars and a 7 500 tax credit? And their answer is twofold. One, well, they don't like Elon and number two, uh, range anxiety and I'm like, come on man, this super like I did not know this was still a thing.

What are you seeing out there so you recognize the don't like Elon as a real thing because we hear it all the time now from client. Oh gosh, especially if they watch CNN So I'm sorry, no, no, like people at Tesla and Elon and insists that this isn't happening. but but unfortunately, a lot of people don't like him and oh it is. People are vehemently angry at anyone and it's crazy.

It's the same person and I'm like yeah, oh sorry, go on. Uh yeah. I Was just gonna say even though you know, uh, Elon has been investing in Fremont and it's the most productive Automotive Factory in North America you've got plenty of Engineers up in NorCal this announcement about an engineering HQ of 400 1400 jobs. Uh in NorCal the other day with Gavin Newsom and Elon Musk LED that same person to say oh well, sounds like Elon's got to go back to California messed up going to Texas huh? but I I think I think they recognize that they want to find real engineering Talent they need to be in California for sure, right? right? Exactly.

But but I guess more broadly that's sentiment. like why why is there so much jaded sort of anger towards Elon Is it really just because of Twitter or what is it this weekend could infuriate anybody you know I See, this was kind of. Now you're getting into the whole Tesla thing. You know this was kind of my my thing.

It's like okay, well we sell electric vehicles. So the guy who goes to space and wants to save the environment. What are you gonna say? You don't like this guy. All he wants to do is go to space and you know, save the environment you can't not like Elon right? But then he buys Twitter right? Okay, he buys Twitter Okay, he fires everybody.

Okay, that didn't go over very well. Okay, we can all live because I Don't think anybody misses the Twitter people that bad. All right. Fine, we can go through that.

Sorry to my friends who were fired. I I Do love you guys. but um, but then it's like I'm gonna tweet about all these political things now. I've done this on your show before where we talk about politics and everybody hates me when we talk about politics because it's like you know, half people agree and half people don't agree if you talk about politics.

So if I say what? I think about the santis. There's gonna be a lot of people who comment that they hey Ross and they don't want them on the show anymore. you know? So I it's just not I Gotta know, come on to Santa's disaster. I mean he's a disaster so you know, Don't worry, the Democrats are just as bad on the other side.

so you can say what you want to say: I'm I'm an independent although they were so right I am I was a Democrat my whole life and did you switch? I I Yeah I You know the way I feel as a business owner and as somebody who works really hard to create jobs and pay people and benefits that the demonization of success from the Democrats is a crime like wow. Our society needs entrepreneurs like you. Okay young people who want to build businesses and create jobs. you.

pump tons of money into the economy. You know, like without small business owners, there is no America Okay So when people are successful, they make money. Okay, it's not a bad thing. like I have clients who are from every background in every kind of career and many of them have been very successful in their Industries from hard work you know, like hard work and then to demonize them because they have millions of dollars and saying they don't pay their share when we're paying 55 of our income plus another 10 when we buy something.

So 65 of my income goes to the taxpayers, 65 of my income. Okay, 55 in regular taxes, 10 on sales taxes when I buy anything. Okay I I Just I don't want to be called not paying my fair share. It's bull.

Okay, wealthy people pay. a lot of wealthy people pay more than their fair share. some do not for sure and there's lots of abuse. But just the same.

You cannot demonize success like this is America It's a capitalist society and we want to encourage young people to go out and start businesses and take risks and be successful and become multi-millionaires If they work really hard, some do it by the time you're 30. Okay, do you think the Democratic party then has has really, uh, ruined their their messaging here in the last a couple years? Even yeah, it started with this and it's gotten worse with the Woke movement. you know? So you know. On the right we have the extremist anti-Semitism and racism and on the left now we have this extremist wokism where almost anything you can say or do is wrong you know? and and it hurts the cause of liberalism because I'm a liberal by nature.

but forcing everybody to have all these pronouns is not necessarily the solution for liberalism and for acceptance of people you know. I think I I believe very strongly in respecting people's differences. Like you know, people are different, some people are weird, whatever you want to call it and we should respect people for who they are. But then it gets to this other extreme where I've got to have like a separate bathroom for everybody in the world.

It's like it gets ridiculous. You know it's just like pee or don't pee. You know, like I don't know. um I don't even think they should have genders on bathrooms anymore.

Like does it really matter? You know, like just go in the bathroom and pee. I don't you know? I don't know, it's gotten ridiculous. So I I don't want to go into politics too much because it's a lose-lose conversation. but I think both parties have gotten extreme and it's not to the benefit of America and I'd love to see both parties run candidates that aren't extremists or 80 years old.

so I think it would benefit America if there are people running who are not extremists sooner who are not 80 years old on both sides. Do you think the reason we see so much extremism and even why you see so much potentially divisiveness when Elon Musk has a common is is because the divisive stuff is what ends up becoming popular on social media, whereas the neutral stuff isn't that popular. When has anybody talked about Dilbert People haven't talked about Dilbert in in 30 years, but he goes on a racist rant and Dilbert will sell more Dilbert dolls and costumes and whatever to the right than they've ever sold you know? And he gets banned from all his newspapers after 30 years that they didn't know he was a racist. But it's like the media and social media loves these extremist things that they can talk about.

You know, nobody wants you know boring headlines right? So Dilbert goes on a racist rant is like a great headline and they run with it and and everybody talks about it. So this is Elon's problem is he chimes in and comments on a bunch of uh, issues that are complex. Oftentimes his view of those issues may or may not be accurate to a lot of people and then they basically don't like him. So how does that sell electric vehicles? And that's the problem.

That's the problem. that's why I say owning Twitter is a fundamental like conflict of interest with Tesla because Tesla sells electric vehicles and and like storage of energy to basically people in California you know the biggest market for Tesla and then he goes out every week and says things that don't sell EVS sells Twitter looks, you know views but doesn't sell EVs And and that's one of the main issues that Tesla faces now because it seems like it's sad that they have to cut prices so much to sell cars. and part of that is whether they like it or not the Optics around politics and all this kind of issues. and I think if they were advertising and if they were minimizing the effect of all this Politics on their sales, they wouldn't have had to cut prices by so much.

Um, now you tried running for the board, Tell me about that because it sounds like you wanted to give that sort of reasonable maybe advice to Martin and and Elon Musk and the team? it's It's not just the advice because I think I think I think Tesla is really open to a lot of stuff whether Elon likes it or not. So like Tesla The company is a little bit different than Elon's Tesla in that you know what and I'll see more of it this week. The team at Tesla works so hard. You know there's such motivated, dedicated people and they're asked to do so much so difficult the tasks and Elon is is quite the extremist in his goals and so people who work at Tesla you know, try really hard.

But I always think that they're It's always like they're under manned, undergunned. It always feels like that. and that's how it always feels with the media. And now I think it was quietly admitted that they stopped selling full self-driving today and so new.

Tesla Buyers cannot get full self-driving today because of the Nhtsb. Uh, recall, those fixes have not been put in place and it seems as if Tesla is voluntarily agreed to stop selling full self-driving in the meantime. Now I haven't caught on the website and verified all this kind of stuff and and I'll figure this out. but this is exactly what I was fearing.

This is exactly I think it's I think it's pausing. Uh, pausing the capability of enrolling in FSD I Think you won't get it? Yeah, if I buy a Tesla today, I I can't get people driving right? right? right? right? And a week ago I could have and this is the type of stuff why I ran for the board because I feel like they don't manage the Optics around these things. Um, I don't think they're managing The Regulators right? I Think that they need to Lobby This is a pay-to-play government. If you don't pay, they don't play that look at SPF I mean how how obvious is it that it's a pay-to-play government and if you want to be to like, leave you alone you got to like help people win elections and now wait wait I Just want to clarify that what what you're saying is Tesla gets all the regulatory Nightmare and the general lack of support from the government even though recently we've had some things with Biden and chargers and that generally there doesn't seem to be a lot of pro Tesla talk especially from politicians.

Uh, and then you're comparing them to a straight up fraud like Sam Bankman Freed who had everyone fooled because he was throwing money at all the politicians and he got everything done he wanted. He had to put up no bail. The bail is a lie. Okay, his parents house they don't own, it's owned by Stanford University Stanford Professors put up 700 grand for bail.

He has no bail. He's back at his house, emailing, texting everybody you know, trying to talk people out of testifying, trying to convince people he didn't steal money, he's doing Twitter spaces. he's doing. you know? and I'm like, when have I ever heard of this guy? What? Where have I ever heard a guy steals billions of dollars and somehow it's like nothing happened.

Well, he's got his two best friends who are rats and they've ratted him out. so they just tacked on a bunch of more charges against him. But they haven't revoked his bail. They haven't said you have to, You know you're a flight risk or anything.

Oh, there's a lot of Flight Risk Why? Because he knows he's paid enough people that it's like who knows what's gonna happen. But he's paid everybody and and believe it or not, Stanford University is completely helping him and it's like the university has no shame at all that their professors were actually involved with the fraud. His parents his dad was like living in the Bahamas in one of the fraud places advising him during the fraud. Like, how is he even allowed to continue teaching at Stanford being in implicated in one of the biggest frauds in the world And it's just like you pay to play.

You pay to play if you pay everybody. Nobody seems to want to deal with SPF because whatever they uncover under the onion makes everybody look bad. Okay, right, right? Because he after all sent money in his own words publicly to Democrats and then through shell entities or other individuals to Republicans. So ultimately, both sides ended up getting paid by him and he did it in the most optically ideal Manner And and so you're suggesting, hey, maybe they they pull back the investigation a little bit or at least slow it down.

Let it kind of, uh, you know, fizzle out in fact I Think the uh, you've got the the civil cases paused. Uh. All of a sudden, the SEC in Commodity Future Trading commission their investigation while the criminal goes on right? uh? is? Is this all like being done on purpose to kind of let that let that kind of like take a long time. So we distance ourselves from this fraud the way I see it is that they're hoping that the public furor will go down over time and that maybe I don't know because I it because his best friend's ratting him out like they have some pretty good evidence.

you know because he turned over emails and they got two people to testify. But I think there's this idea that unlike Elizabeth Holmes where she got pregnant tried to pretend like you know she's a mom and good person. now you can't send me to jail and then they send her to jail. So that was like really great.

So I think they think if time goes on and he like helps the fraud out that there'll be this like lesser desire to send him to jail for 10 years. and since he's a kid and he's running I'm the smart idiot. um defense where it's like you know I was really smart and I was able to like steal billions of dollars but I was actually just an idiot and didn't know what I was doing. You know it's kind of hard to be both.

So he's writing the smart idiot defense where Madoff basically was like all right, you caught me, it took you long enough you know with SPF because he's not in his 70s, he's like holy crap I could spend a lot of time in jail here and it won't be fun. So I gotta really like do this. but I've never seen anything like this where a person such a huge fraud can like live with their mom with no bail and tweet and and contact Witnesses and and use apps he's not supposed to use and the government like seems inept at putting this guy behind bars which is where he belongs until this trial. Now that said, there's a lot of people behind bars for doing very little.

Yeah, Well God forbid I Hate to say it because our country is so biased, but imagine if he was a different race, would he still be treated the same And the question and the answer is absurdly not. So it's it's just further exacerbates the huge inequality in our judicial system and it's an embarrassment to be honest, but that's sort of. Also, potentially. I mean I'd love to hear your take on uh Andrew Tate apparently being in jail without potentially charges uh filed against them at least Yes.

Andrew Tate is in jail in Romania right? right? Okay, why is he in Romania Nobody seems to want to explain this to me like why do people care about Andrew Tate okay I don't know whether he did it or didn't do it, but this guy's in jail in Romania Okay, there's like a Netflix show like the worst prisons in the world you know and it's like goes to all these random countries. What is Andrew Tate doing in Romania See, it's not United States There's no like due process and judicial system in Romania You think you should be protected by U.S rules when you're in Romania it doesn't work that way. Like how many stories have you heard of people who like smoke weed who get arrested in like Singapore and end up in jail for like life. You know you can go to life.

You get life in jail in Singapore for drugs. Well this was like the Russian uh or sorry. the NBA player the American NBA player who visited Russia in Wisconsin with a little bit of cannabis and she was political I mean you know they knew she's been smoking cannabis the whole time. You know it's like come on, oh yeah, it's like that was all political I Feel bad for her.

She got caught up. She was traveling on the wrong day taking money from the wrong people. That's why you don't work in Russia because you can end up a pawn. thank God So is your suggestion there that here in America Maybe our legal system is so well or or well established that you have more protections, but then you could potentially also be a Sam Bateman freed and pay your way to play the game.

kind of. you know, pay to play as you've said whereas maybe you go to Romania it don't work that way. And even though Andrew Tate's got his compound or Studio or whatever, maybe that's not the best place to be Tate is Tata Romanian name is he from Romania is he Romanian is is Andrew Tate Romanian that's I don't know what his Heritage is like that I've ever heard of. So my question is what is like So like if you go live in I don't know.

Let's say you go live in Nigeria Okay Nigeria is a great country, beautiful place. they speak English you're doing business in Nigeria Well you got to deal with the Nigerian government. Okay and whether you like it or not, it's not the easiest government to deal with. So if you get on the wrong side of them, you can be in real trouble right? So when you go to foreign countries and you do business in foreign countries or whatever you're doing, each country is different and certain countries have rule of law with real good laws and other countries do not go away.

Yeah, apparently he he was born at Walter Reed and he said weed. You know, can we smoke weed and they're like no people don't smoke weed in Singapore because you go to jail for life Now that is completely inhumane to me that you could go to jail for life for smoking weed in Singapore But those are the rules and laws of that country now. I Don't know what the rules and laws in Romania are, but I can't imagine them being that fair. Yeah, that's a good point.

yeah. I mean after all, Okay, so it looks like he was actually born at Walter Reed uh in Washington DC and he's basically a dual citizen UK Us? So yeah, I mean other than owning property in Romania why would he have a property in Romania Is there some lovely place for properties now? It's a great question. You know there there are some some clips out there that suggest you know maybe uh and and you know some people say these are fake. Some people say these are real, but some people say they're basically in clips that maybe Andrew Tate wanted to be there because certain laws around uh, potentially exploitation are less are likely to be punished.

I don't know I would assume Romania probably has child exploitation laws like most countries, but I think if you're looking for countries where you can manipulate things with cash, many countries it's easier to do like. Maybe in Romania I'm not saying that's true or not. but in the United States you gotta you know Dole out Millions You know, like SPF was dolting out Millions to get influence and a lot of smaller countries. you know what is 20 grand get you or 50? Grand Ah, interesting.

Okay, so potentially the suggestion that hey, you know, maybe it's you know Sam Bateman freed what had access to billions. What did this? I do before he was famous for getting arrested Kickboxer. He was like the toxic masculine kickboxer and so like I I See these people like defending him like online and I'm like do you even know this person like you're defending a kickboxer American Kickboxer who's arrested in Romania for sex trafficking and I'm like, why why are you a fan of this guy I I Guess Hopefully the uh, the idea would be that the allegations motivating he's motivating. What about him is motivating? uh, his videos.

He's got some interesting videos that, uh, inspire people and that's like the new thing. toxic masculinity I'm still a man I can not be woke, you know I don't know I don't know, not not a tape so you're not a top G fan don't free top G is what you're saying I Don't care about him at all I mean it's like why why would I care about some guy in a Romanian prison when there's real issues here in America with real people who are probably imprisoned completely wrongfully that we could talk about and maybe help. But you know I don't know We can talk about trains crashing in Ohio too. I Mean you know that's a bigger deal with me than Andrew Tate Why North Southern has like nuclear trains going through neighborhoods.

You know, Like you know that that's probably an issue that would be more interesting to discuss than some random. It's a good point. So how about the Tesla board? So I tweeted you about this and we could talk about the train as well. But before we run out of time, we gotta talk about the board of Tesla because you tweeted just three days ago on Friday just minutes after the market closed.

After careful consideration I've decided to withdraw my nomination for the Tesla board of Directors as a friendly activist I feel that shareholders have been heard. Looking forward to what Tesla has to show us next week. Dollar sign TSLA I replied to you and then you ratioed me but I replied flip-flopping paper hander because you had announced running for the board and then after careful consideration you didn't anymore and then you ratioed Me by replying with learn from the best flip-flopper I know. So now the best flipper flip-flopper you know is confronting you on why you flip-flopped Yeah, you know.

and I think that you flip-flop really well and I've learned a lot from you. you know, like this whole idea you can't learn from younger people is like you know. So I kind of have to give you credit for for some of this because you know when you ran for governor I told you it was a bad idea probably and you would probably lose because it's rigged and I really respected that, you tried like I really respected that and you spent a lot of time and money to do these things and you didn't do it just as some like stunt you know YouTube stunt which is like a lot of people do those kind of things you did want to win. You know you did have ideas and you did put together like a real campaign and and you know I I think Gavin Newsom spent a lot of nights worrying about you now I don't know how many nights he worried but I'm sure there was at least one night he was like I can't believe this YouTuber guys going after me I don't know I don't know I was watching him speak with Elon the other day and I was thinking about how annoying he is.

um and I was like I was happy to support you for governor but I think I've seen you do this and I think I don't I think changing your mind is a healthy thing like I think there's a lot of things we we do or we want to do and they seem like good ideas. and then as you kind of go through the process there's new information or things you learn in the process that then maybe change the way you view the outcome, potentials and and desires. and and I and it was hard for me, you know to change my mind. but I I thought about it, you know and you know I I Have to give my wife a lot of credit because you know it's probably one of the biggest reasons I married Joe is she's really smart and um and you know women in my you know like my wife and I think for a lot of men, probably you too your wife acts as sort of this like your better half I think that's what they call it right? Your better half you know.

So like I'll say things to her and she listens because you know women like pay like they don't forget anything ever that you've ever said. So if you don't know that women never forget anything you'll ever say. so there's a good that there's a bad to that you know. So ideally you don't say things in Anger to your wife because they don't forget that.

but I was talking about my goals in my life and what I'm trying to do and and you know I was telling my wife some of the issues I was realizing I was going to have to face and she said well, how does that fit in with your goals and what you're trying to do and I was like you're that's a very good point This battle doesn't fit in to my goals really and as much as I want to make Tesla a better company, am I really going to make Tesla a better company by being on the board And then I realized that I could probably win being on the board and if I won, what would happen. And then I started thinking about my life being on Tesla's board because during the entire time of this couple weeks, the Tesla board was in court for Elam on two cases. one was the tweet from 2018 so I was kind of laughing I'm like we're still fighting cases from 2018 tweets and the second was over his compensation package. and I'm watching board members testify for weeks at trials during this process.

and I'm like, is this what I want to do I I'm trying to get Tesla to advertise, have better service, have a secession plan, you know, have some sort of sensible stock, you know, sales strategy. but if I'm on the board of directors as a test, I'm going to spend half my time in court I'm going to be dealing with problems I'm going to be dealing with Regulators I'm going to deal with unions you know, like like I don't want to do this I don't want to be in court and dealing with lawyers all the time for Tesla because that's what they do at the Port that's basically what they do and so I realized that it wasn't going to be the best way to solve the problems I saw Tesla having it wasn't going to be beneficial certainly to my clients because that was ultimately one of the biggest factors. Even though my clients are very supportive of me running for the board and many of them were like what you're not doing this because they are angry about the same issues I'm angry about and I didn't just arbitrarily decide to run for the board for my health I do represent a lot of Tesla shareholders and a decent amount of stock and it's like you know people are passed but I realized like hopefully Tesla would you know respond to me So I sent them an email last week and I was basically like you know, here's where I stand with these issues and I really want to you know, come out to Austin and like talk to you guys about this and solve this without having to be on the board because being on the board doesn't necessarily solve these problems and being on the board and fighting with Elon every day about these issues doesn't solve the problem if he's not going to agree to it anyways and so I would rather just try to solve the problems by talking to management team and Elon maybe we can do it next week and I heard nothing from them for days so I was like nah they they just don't want anything to do with me. okay that's fine, they're probably sick of me anyways and then you know they called me on Wednesday night and we had a good talk and and decided to go out to Austin and and hopefully we'll have an opportunity to address some of these issues and and it was kind of like I had already kind of decided that I wasn't going to run anyways before I talked to them and then after I talked to them I was like really happy because you know I I think they care I think they want to do all these things I don't think that Tesla doesn't agree with me in any of these issues I think it's just really hard to get things done because they have so many priorities and so under resourced.

and it's mostly it sounds like what I'm hearing is even though you could have been a fantastic voice that actually connects wit