Hey everyone welcome back to another episode of the meet kevin show. Today we are bringing back ross gerber to help us understand what the heck is going on in the market. Why are small caps, the hedge of the world right now going into the toilet? Why is everyone going into the megas? What's gon na happen in 2022, when we get potentially three rate increases? Is the fed gon na lose it? Are we gon na pull off another 2000 into 2018, where the market ends up falling? I don't know, but i think ross has some insight, so welcome aboard ross. What do you got? Hey, how's it going kevin good to see you again welcome back.

I forgot my sweater. I i'm sorry, but i'm jewish no worries. You know we got two days left. So we'll you know you got two days.

You should have to send post a twitter picture with your sweater uh, oh and, of course, remember. This is ross gerber from gerber, kawasaki, etf and fund, linked in the description down below, not sponsored all right ross, not sponsored, and also i am a financial advisor. So please do not take anything to be construed as specific financial advice to you. We are financial advisors.

Happy to help you as well um, but anything you do is your own, but we will be talking about investments today and all of them have risks and, of course, uh past performance, although mine is very good, is not indicative of potential future results. Although it's a very good indicator in my opinion, um, so that's my shoes, you've perfected that disclaimer well, it's such a ridiculous disclaimer that past performance is not indicative of future results. There is nothing more indicative of future results than your past performance actually, but it may not be true, i may all of a sudden have a turn after 28 years and start doing really crappily for a long time. What do you think about kathy then? Because exactly he's been having a year, man exactly well okay, so i want to preface this by saying we're investors in our at my firm.

We we've had at times millions and millions of dollars with arc. We very much work with them and when i went through my experience with tesla kathy and the ark team was one of the only teams that we worked with that got tesla that made a lot of money on tesla like we did and supported. We supported each other through a very hard time. You know, so i'm very grateful for my relationship with arc and i have tremendous respect for their team.

So i want to preface it with that, but i think they've kind of run into this wall right now and it's crushing them and - and i haven't seen this level of missing where the market is on such a degree from such smart people in a long time, Because they've underperformed the s p by like 40 or 50 percent this year substantially, i mean like that. I've never had that happen like i've had bad years for sure, but to diverge so much so from the market without really reassessing what the hell you're doing is the part that i'm concerned about, like she's, doubling down on. What's not working yeah and i went through a stretch in the end of 1516, so in 2015 into 2016 was a really hard stretch in the market, and i was cold like i just we had. Oh, we were over levered in tech and the tech market got hammered and we were down hard.

You know like sucks right, because when you're in tech like high pe tech and things go down, there isn't like a dividend, that's going to save you. You know like there isn't there isn't earnings, you know that are going to save you, so it's all the perception of that business future, and so, when things get tough in tech, the values can keep going down and down, and i would say that with arc today, Even if you look at our current holdings, they can keep going down because none of them are even cheap at what she owns today. So there's been no adjustment to the realities that were in a compressing pe environment over the next couple years and when pes are compressing, your earnings need to be going up a lot to justify them and that's why we use a thing called the peg ratio. P e to growth rate is the way we value companies not just like what we feel their future.

Innovative value will be in five years, and so you know they need to readjust what they're doing right now and they haven't done that yet and i think they're great investors - and these are the kind of shocks that force you to readjust. Your thinking like i did in 15 and 16 and and and by the early 16, i was like i'm not doing this again, like i've made some mistakes here. That have cost me money, and one of those mistakes is exactly what kathy's doing right now, which is you don't adjust to the fact that what was working great for you isn't working anymore, and you got to kind of like like like. If you sold everything and started rebuying, would you re-buy back all those stocks again exactly in the position she has? I doubt it.

I doubt it that's a good point, so you do you think people get stuck where they're like i just i. I hope it goes back up. I don't want to take the loss because i'll feel like a loser, so i'm just gon na stick with this, but if they just sold everything and reallocated they'd be like yeah. No, i'm not going back into that.

That's exactly the biggest mistake investors make. If you know i like to educate people about investing, like that's one of my favorite things about my position, because i've been doing it. My whole life and i've made like every mistake right like i've, made every mistake to some degree at some point, and ideally you minimize the pain of those mistakes. Okay and one day i'll write a book about all the mistakes you can make investing, which is definitely a book worth um, so static.

Thinking like the idea that what we thought about a year or two ago is somehow still relevant is actually like a mental comfort creator. In other words, we don't like the rapid change. That's constantly happening in the world and markets reflect those changes, just like the last month or two you're getting hammered because omicron's come up. Okay, so omicron comes around and everybody gets scared.

Okay, this is opportunity because it turns out omicron. Isn't that scary? Okay? So it's a short-term event. That's created a lot of stress in the system, legitimate stress, but who wins here? Okay, i know who loses the cruise lines? They lose. It's like 86 cruise lines filled with coveted passengers.

It's not a great business anymore, it's just not, but who wins? Okay, who wins, because corona has been a huge winner for the economy. Let's be real, let's be real. If anything i was wrong about in 2020 was corona. I thought we would have the worst bear market ever ever.

I took many steps to protect my company that i thought things would be horrible for till now, but we've ended up having the two best years of my career right. That's amazing! So my thinking the way - i think and - and i was talking about this last night - because i watched this elon interview and elon and i are very different - i'm much more like a jazz musician and he's an engineer. So my mind tends to like bounce around in lots of different places and he's, like laser engineer, focused like building, and so flexibility is sort of my hallmark like i'm very adaptable. Like i've been doing this a long time, things are going to change now.

Everybody's talking about nfts and the metabours six months ago, nobody said a word about this. Nothing changed, roblox was here, everything was here, but it becomes popular and then it's a concept and then it's an investment theme and then investors need to say if i'm not in this theme, i need to take a look at this. Not just immediately just go out. It's a metaverse, we're not living in the metaverse, forget it and that closed-mindedness hurts people now.

What happens is if you're, a winner in one area and you're really good at that, and you really reinforce the winning from what you're good at it's real hard to change. It's real hard so for her she's all in on innovation. I want you to explain to me how roku is innovative. What exactly does roku? Do that's innovative in any way, and this is like her number two position.

There's nothing. In fact, roku is like un-innovative. It's literally a copy of every other tv set and apple tv, and they don't even have their own content and youtube pulls their their content, and the thing is worthless, basically, is what we learned. Okay.

So it's a it's a way to watch youtube tv. If you can't afford a samsung and then the youtube ads, not necessarily the roku ones, right and and youtube is what you want to own right kevin you want to. I i got a lot of google stock. I keep adding to it too.

Did you really pay 11 million in taxes? I will be yes, i want to own youtube, you know what i mean and and like google, if that was her number two position like my friend gary gary uh blacks, you know who also has a fun like mine, uh, that's a future innovative fun future fun. That's right, the future pun so gary's like one of my good friends in investing he's one of the smartest people. I know, and he knows tesla in a different way that i know tesla. So it's really great when we work together because he's he's great he's just great, so his fun number two position is google and i called him the other day.

I go why? Google, all of a sudden google, is like listen, it's a benchmark and we all compare to this benchmark, which is the same reason we all own google, a we have to, because it's so big in the benchmark. So this goes into the thing you were just talking about: it's like i'm getting killed in small caps, i'm getting killed in mid caps, but here i am in large caps killing it yeah like. Why is that and there's a reason and there's a reason, because that's cash for people now people don't hold cash, so funds like mine funds like gary's instead of holding cash, we hold google and apple yeah. So when you see those stocks rising and the overall market falling everybody's like trying to analyze this, it's actually just cash like like a lot of investment.

People don't understand this concept that we don't hold cash at my firm, this is uh other securities. This one right here, uh, i have my my little spreadsheet my portfolio spreadsheet. This is uh apple right here, apple and i'm at 2.78, but i put up to eight percent cash. Hold is what i have written there same concept yeah but see you're, underweight apple, so you're going to underperform the index hard here, because apple's actually doing pretty well and that apples would say like a four to six percent weighting.

Even in the index. In the s p and if you're in the iwf, it's like a ten percent waiting, so essentially, if you're not like five to ten percent weighted in apple, it's super hard to outperform the s p. So, like you have to make this decision as a fund manager. Do and and and we kind of walk the line of we want to have weightings close to the big cap weightings of the companies we like in big cap, because if we don't, we can't outperform because everybody piles into those things when things get tough.

And then you underperform, it's like it's it's so up! So what i want to ask you, though, so yeah so you're underway to you're, going to underperform, if you're underway to google and apple well, unless you're way way overweight on tesla like 40, but yeah like you're like we are yeah yeah. So isn't it possible, though, that you know using your analogy kathy wood? Is that laser-focused engineer and that, because she's doubling down on what right now are losers, she could be setting up for that triple or quadruple, whereas we're setting up for the the 10 or 15 percent. Maybe if we're trying to go for those benchmarks? Well right! So there's a home run, hitter right, the home run, hitter doesn't swing for, doubles and singles. I i tend to i'm not a home run hitter by nature, because i think that's a really hard way to invest so the way i do it is i like to hit lots of singles and doubles, and then i put out some good hitters out there too.

You know, but really the game is betting. When your home run hitters hitting home runs. That's when you want a big bet, big on your home, run hitter. So it's really.

If all you do is swing for the fences with every player. You know you might hit a few, but it's not going to be consistent. What it's really about is betting on the right players at the right time. Yeah doing well, you know because if you all you're doing is hitting home runs it's real hard because a lot of the days like i'm just hitting singles and doubles, and i'm happy i'm happy.

If i, if a couple of my positions outperform and and then i'm looking for the next tesla, so i know tesla is not going to be the next tesla. So, like i'm looking for the next tesla, so i spend most of my year looking for the next tesla and typically in a year, not that i'm gon na find the next tesla. But typically in a year i have about four or five really good stock picks over the whole year, so, like those i have to maximize. So if i so, if i hit something right here, like ggpi, you know i really like polestar 11 stock uh spac uh spackle, finishing q1 q2.

It's a great company, they're delivering cars. The demand for cars is off the charts. If you can make a car and deliver a car sold, we were looking at used cars today, like all used teslas cost more than noob tesla's like you can't buy a tesla for less than a new car price. It's insane it's insane and like these haters are like oh you're using carvano.

So i like went to five different sites and i was like dude everywhere. You look. A model y cost 60 plus thousand used. I know i know so.

All-Star can make thousand fifty thousand cars a year, they're sold well rivian and lucid can't get the cars out the door right. So pole star, you know, maybe that's a big winner. I think that's a three to five x in five years that they can deliver. You know so so you got to find the next big winner and that's the challenge.

You know who's that going to be who's going to deliver who's going to come through, because certainly the fintechs have dissed me this this year you know going to square paypal and coinbase just been dogs in my portfolio, oh yeah, well, crypto's had a good year. You know, and so we've had the tax loss harvest out of rf. We had a tax loss, harvest out of square and paypal, um, we'll we'll be back in these positions. We didn't tax lost harvest out of coinbase because i'm most bullish on coinbase, but you know we're going to buy back these positions in 30 days, but it sucks.

So when, when did you guys go? Oh sorry, um we're still closing them we're still closing. Oh okay! Okay, so do you think we're seeing that broadly in the market that people are just like the closer we get to the end of the year? We're just going to keep seeing pain, pain, pain and then it might take 30 days for them to actually start running again or people just switch into an alternate. You know fintech like if you're in coinbase, maybe you go into, i don't know uh square or paypal. Well, institutional players: don't do that because they can't um individuals can so.

This is a real advantage of an individual investor versus institutional investor is like. I have msos in my fund and i can't just sell it and buy yolo, for example, and just take the tax loss targets i mean i guess i could, but it's like this whole thing you know but like in my personal uh trading accounts for my clients. We can sell msos and buy qrle for sell by cure relief and buy msos and and these tax loss trades are very helpful um. So in funds it's harder to do that easily versus.

Is that? Because, in like the etf, for example, that you have you uh? Don't don't aren't you taxed advantaged anyway to where you could trade and you're not really distributing taxable gains anyway? Well, how does that work? You're, not tax advantage in theory, in the sense of like, if i still sell my tesla to gain it's a taxable gain right. They have this loophole that which i was kind of wondering why kathy's even distributing gains, because it's right, we have this loophole. Why are you even distributing any gains? Like that's also a question i have because the way i see it is if i had this big run-up in tesla, what you do is it's like a 1031 exchange in real estate, where you take your asset and you exchange it for other stocks. So you don't actually sell the stock and that's why etfs have a tax advantage, because you don't actually have to sell a stock.

You can transfer its value to other stocks, tax-free and that's how the index is rebalanced without causing taxes, so etfs in general pay! No taxes, while mutual funds pay anywhere from two to five percent of their assets or more in capital gains distributions, which causes a one to three percent tax cost for clients, which was one of the reasons i started. An etf was for my clients to avoid that, because this is the time of year. My clients have to call me in a month and say: i need money to pay my taxes, because we had a good year. We had more gains this year.

We got gains and we got to pay taxes, and so the etf will help us avoid that over time very exciting, okay, etf, my etf is distributing no gains and we have a small dividend so to to kind of depict that what you're kind of saying is: Let's say someone's an investor and they invest in in gk, and it goes from 23 to 28. That's like a 20 percent gain ish a little bit more. Let's say now it it 25, whatever let's say now: they they sold this. They pay taxes on this gain.

Here, but in the meantime, what you could do is, let's just say as an example: tesla doubles you're, not passing along that if you end up essentially selling half of that, but not really selling it trading it for, let's say apple, google and end phase you're, not Passing along that big tax burden over here, it's all on when they sell, is that what you're saying right, right and i'll give you a perfect example of where this works, because one of the neat things about the technology we use at my firm is: we can Aggregate the investments of all of our 8000 clients into one portfolio to see what our 2.2 billion looks like as a whole. Okay and what it does is. It shows us how much unrealized gains we have in the current positions we have, which at the time is, like hundreds of millions sure like i think we have like 700 million plus in just unrealized gains in my firm right now. So that's the problem, though, because there's a 300 million dollar tax bill embedded in that you think i pay a lot of taxes for the anything i'm helping the government.

You know what i mean so so i don't want to just give that money away. So i have to use tax strategies like donor, advise funds or, like you know, or you just hold it - you just hold it. You know so like tesla's, no brainer, you just hold it, but you're stuck with a big allocation of tesla for the rest of your life. You know unless of course, you're an etf and then you you can do that trading and that balancing and then that's done for you without taxes to you right.

That's right! So now, let's take this back. If i would have had an etf instead of managing individual client accounts and now my etf had 2.2 billion with the same 100, 700 million in gain, and i wanted to get rid of that 700 million in gain without creating that 300 million in taxes. What i can do is transfer all those gain stocks into new stocks without creating a taxable gain dude. My investors, in this case two to three hundred million.

Why and that's why everybody just like make their own etf for their day trading and their their trading. You know it's like, oh because i mean i had quite a few because you're not an investment advisor and it costs money to have an etf. So if you don't have 25 million in it, you don't make money and then there's regulatory and there's you have to follow a thousand rules and there's um. You have to have custodians that will work with you and you have to have a track record in the industry.

You know there's a lot a lot of hoops, but there wasn't even active etfs invented till recently. We're the only ones like gary gary doesn't have a firm. Gary is just his etf, we're the only investment firm, ria that started its own etf for the benefit of its clients. Now i don't like to promote it too much in this sense, because i don't want elizabeth warren figuring this out and then going after this tax benefit, which they very well.

Could they very well could, but it would hurt, vanguard and vanguard is probably the largest contributor to elizabeth warren's. You know life. Who knows good point? That's really interesting, so i want to that's very interesting about the taxes uh and it makes sense why not everybody can do it or you just pick an actively managed fund to go into um. What i wan na, i wan na jump to uh this, this idea of rotating.

How do you handle when you're looking at so uh? I just did this math uh all of the companies like of my portfolio, about like 19. No sorry uh, it's uh! How many stocks do you have uh like core, probably 12, 14., and so of those about 10 is small cap and fintech and those are just getting obliterated like absolutely destroyed, and so i realize - and i've noticed this for for for weeks now - that small caps are Like the butt of the market, everybody's shorting, those to hedge, their big ones, and people throwing cash in the big at what point uh? Is it just like just make the shift like take that 10 put it into apple and then just buy it back later versus just like? Ah, but what if i'm too late, and then you just kind of sit there and you watch it continue to bleed like at what point? Are you not too late right? Okay, so what's your cell rule say that again, what what's your sell rule? When do you sell a stock? How much are you willing to lose before you sell? Oh, did you sell anybody? Do you still own amc? I think you bought amc around 50. uh-huh yeah well, see you still on nc is unique because i don't want to hear about unique. I don't want to hear about a movement, the movement's i'm sorry, there's no way.

You think that, but no no stocks are stocks. Okay, there's no movement commitment not to sell those. Let's use a different example: let's see no wrong. This is my involved robin.

This is my second one. The stock market is not a place for morality and ideas. It is not a place for the scan to save the theater world. That is not how you do it the stock right.

No, listen! It's really simple. Okay, it's a number on a screen and if it keeps going down it doesn't matter what the letters are. Next to it you're attached to a number on a screen: okay, it's like an nft. You know it's like to sell it.

It's a it's digital, okay, so so think about it. This way, i have a rule that makes it really simple. For me, i sell when i'm down 15 percent. I lose 15.

Sometimes i lose a little more and sometimes i buy, because i'm so convinced that this stock, not because of a movement but because the earnings like, like my petco investment right now that i'm down on that. I love and i think it's so undervalued. I just bought more, even though i'm down on okay. Now i still tax on service a little bit of it, but but it's like that's the rarity, where i'm so convinced that the stock is a buy that i'm buying it um down but 95 of the time.

If i'm down 15, i sell the stock, i don't care what it is. I just sold square. I love square, i love it. I just sold square too right.

Well, something you were in everybody else. Dude it's down! Eight bucks! Okay, you know we all lost on square. He changed the name to block like i don't understand what he's thinking chase the name to block the stock goes tumbling, i'm out it has nothing to do with whether i like square. I will only lose so much on a stock and by doing that, fifteen percent - you take 15, and by doing that, you take all this emotion and thought process out of it and what you'll find is 75 of the time.

You'll save yourself from losing a lot more money, 25 of the time the stock will recover. But that's okay, that's okay, because more likely than not it's a good sell. Okay! So a lot of hedge funds - and i want you to think about this - they clean all their positions at the end of the year, sell them all right because they want to realize profits, so they can take their kai and they want to start like tepper. Does this david tepper is one of my favorite traders of all time, appaloosa management he's kind of owns the panthers now and he doesn't really trade for the public anymore.

He he closed his fund and made too much money, and now he just likes football. So this guy david tepper is a genius he's just a genius traitor like flat-out traitor and he used to do this every year. So he starts the year january 1st with cash. So the way his thinking is isn't constrained by gains and losses, and his previous investments he's like now, this year january, 1st, what's going to go up this year, okay, and that's the way you have to think about it, because this year, there's going to be five Stocks that go through the roof through the roof - i don't know what they are robin.

I don't know about that. You know me and this guy, adam singer were debating robin hood versus coinbase yesterday on twitter. I i own coinbase, i think coinbase is a winner. I think coinbase is a winner, because it's management, the guy who runs coinbase, is brian armstrong, is a winner.

Okay, he's just so good at what he does. Vlad is one of the worst ceos in america. Okay, so when you're investing in a company you're, investing in management and management is one of the most important parts of the investment process and where i spend the most amount of time actually wow yeah analysts send me numbers. I got analysts all over the place.

Send me numbers: i got the numbers, hopefully you're right, even though you're mostly wrong right, every quarter beat the analyst beat the analyst. I just got all the analyst numbers from tesla um. Now they added standard deviation of 18 000 cars, because the analysts are always wrong. So tesla now added in it's so funny what they sent me.

They go. Here's the analyst estimates for this quarter, plus the 18 000 standard deviation. So this is probably the right number, because they're always wrong about one standard, deviation, wow um! No! So, like i know what the numbers are supposed to be for every company i own great, they have to do that so who's gon na make that happen management. That's the way it works, so so i'll bet on coinbase any day over robinhood any day.

Okay, so uh, why not in the etfs do the same thing? Maybe should should kathy just clean the slate kathy start over? I don't what like does it matter? Well, i wanted to prepare for this, so i wanted to spend a little more time watching some of kathy's recent interviews. So i watched a few of them and i know her head of research. This guy, who runs research at arc, is a young guy, really smart, really smart and we have very similar, like thought processes like they are not off like with their basic belief systems of the future. I i don't think they're off the problem is their whole team.

Is young? Is that brett just like just like my team? Actually so my team's young yeah brett and my team's young and their team's young, but the difference? Is i've been trading stocks for 28 years and kathy's been doing it probably longer than me? But i don't think she was a stock trader. She started her funds in 2014. She's had an amazing track record. There's no question about it, but a lot of that track record was predicated on gains that she made over the last year year and a half just like for me too, because we were right about tesla yeah.

So i'm not going to try to pretend that tesla hasn't made a huge impact on my overall returns, because it has we've had many other stocks do well too, like nvidia over the years and videos done just as well as tesla for us, and it's also a Top holding, but i'm just saying like you know you have to understand where you get all this extra alpha, it was pretty obvious. So so for me, i look at their team and i say she said something like now that we're down. I expect to make 40 a year over the next five years, and i said you know when the last time i heard that was in the 90s, when cisco was supposed to do 40 a year for the next five years. I remember hearing these about cisco in like the mid 90s late 90s and, of course that didn't happen um, because to do 40 a year in earnings growth for a company for the next five years straight and it's already a big company is almost impossible.

You know it's like a really hard thing to do so, what happens? Is they extrapolate out what they think their companies are going to earn? In 2020, i mean 2026, let's say and and then they extrapolate the values of each one of these companies in 2020. Six and then they they they do a 30 pe based off the 2026 earnings, and then they say: if all this happens, our fund will be up 40 a year. This is cisco by the way like ouch, if you bought it at any point during that excitement. In like 99, because actually, if you zoom in it's more, you can see it better like around that time like, because the way it looks now because you're looking at probably like a 20 or 30 year, chart yeah but like if you zoom in at that time.

You know you see this massive run up in the stock. I mean just massive and like what people are saying during those periods of time when it's going up. You know it's kind of funny to look back because you're like cisco was supposed to do and and what ended up happening like with microsoft too, is that the company did well, but the valuations became reasonable. You know, and and so the predictions weren't so wrong.

Although some of them were but the valuations were wrong, and so so people didn't make money for a decade in microsoft, people didn't make money ever in cisco again. Really there. It is. You know yeah, okay, there you go so this is the week right so like when you're, seeing this massive run up like how long was that that's like years yeah the run-up.

Really i mean look at this. You were five dollars in 97., then you, oh, you had a little bit of a dip down to four after it hit 17. uh. That was in 98 yeah yeah and then look at this currency crisis.

That was a 20 decline and tech stocks got whacked and it was like only a few months and boy that was an opportunity and then so, if you bought the dip there from 14, it would have gone to 27 to 35. The earlier more than a double here, but now it's insanity - and this was because of y2k. You know everybody thought the computers were all going to die and i don't know how old you were in 99, 87 yeah. Okay.

So when you were like my son's age um, you know like it was like a crazy thing. Like 99 was a crazy thing: the market, the nasdaq doubled in a six-month period of time literally doubled. Now imagine close your eyes right now and imagine the stock market doubling in six months. Oh, my gosh right and people were like it's a bubble right now and i was like no, you haven't seen a real bubble like a real bug, we're here, yeah yeah, exactly exactly um.

So that being said, i think in kathy's case in the ark investment case. I i i go through their top 10 holdings in ark. I can't justify owning six or seven of them. You know like teledoc.

What's so great about teledoc, like i don't know any doctors that use it, anybody can set up like a streaming like a lot of doctors are just using facetime. You know doctors are the worst at implementing technology of almost any group of people in history. Wow, like really so so like. Why is that such a big position like what does twilio do they send you text messages to confirm that your device is safe or whatever like? How is this worth? You know so much money they've never made money.

So my whole point is i and i'm i love kathy. I would love to hear why they think this is so great, hmm, but but ross the company says that they're innovative the company says that they're innovative like arc or twilio both well truly, it was innovative. They innovated the idea that you could get a message back with a number on it. That would somehow make something more secure, which actually really doesn't um authenticators work better than twilio.

I use google authenticator. I i don't trust two 2fa isn't trustworthy. Okay with texting yeah like oh here's, the security code, your your account is now safe. They take over your phone, it's called a 2fa attack.

They take over your phone, they 2fa all your accounts. They change all your passwords and you're screwed. So 2fa is a huge security flaw, so i'd love to talk to kathy because she probably has never been hacked before in a 2fa account, and we can talk about the enormous security flaws that twilio has enormous. It just doesn't work.

Okay, if you want something secure. Google, google authenticator right, you got to use authenticator apps, because the phone systems are easily hackable. What about uh cyber security? Are you getting into those stocks at all like uh, the cloudflare crowdstrike? They got some crazy values. We own crowdstrike, we own crashstrike, and i have never made money in cyber security.

I literally hate this sector because it seems so obvious that you should be able to make money here, yeah and i only own crowdstrike, because i i feel this way - and i still haven't - made money on this dog but like and crash strike's, a great company too, But like what happens is i think, with cyber security? Is it's so expensive to hire the engineers that they make all the money and that the shareholders like the shareholders, just don't make the money? They don't make money, none of them. Do none of these companies make money, so did you see uh, you know they just paid the 180 000 in stock bonuses to i don't know how many employees, but a lot of them just to retain the engineers yeah on top of the apple walkout a week Before from apple store, people who are complaining, they don't even have benefits and they don't even have pay, and i'm tweeting, like tim, just pay these retail people, some money, they're risking corona, to fix your iphone. You know like these companies are so cheap for them to go to 20 to 22 an hour. It's like, oh, my god, and then a couple guys leave for facebook and they're like 200 grand 200 grand 200 grand like nothing yeah, and it's just exacerbates wealth inequality.

Tim mister, social justice engineer, i'm an adult shareholder apple, has plenty of money. Give those people raises at the stores period give them raises. I was looking at uh after i saw that i was looking at um uh automation, companies for like robots and stuff like that. Yeah uh, i don't know, i don't know if you saw it, but i tweeted that i looked into abb and i read their last earnings call and they make uh robots to basically either uh.

You know help employees or or make companies less reliant on on having as many workers. So anyway, i read their earnings call and the executives at least three or four times in the discussion respond to analyst questions with yeah. We want to make more robots, but we can't find the workers to make the robots so well. The workers are, workers are actually right down here in mexico and they're just waiting to get their visas, but we have a system in america where we have a labor shortage and we have unlimited supply of labor at our borders.

That can't wait to be americans and pay taxes, but the democrats, biden and harris my party, our party, the party of immigration, can't seem to fix this problem. It's i mean you, it's in your nailed, it dude uh. You know you know how i'm sure you probably do, but i tried hiring somebody from a different country. I'm like hey you've got the skills, we got a relationship.

I want to move you out here. Pay your salary uh. You know you'll make good money you'll contribute to the economy here, like you're not going to be on social services. It'll be great.

You look at the rules for trying to pull that off yeah unless you've got like a phd forget about it yeah. It is so h1b visa. We used to do this a lot at my firm and it's a nightmare because the actually the legal costs for the immigrants are so high, so it costs five to ten thousand dollars in legal fees. Just to do this h1b thing.

So companies often pay for this. Well, you have to qualify. You have to also prove that there's nobody that you can hire in america that has the same skill set right. It's like this whole thing and then there's a limit.

So what the tech companies do is they file the first day of the year for all the h-1b visas, then they're gone and nobody else gets them except tech companies? Okay, so i think biden said he was going to add more h-1b visa people, but it should just be unlimited, yeah right, yep right so absolutely like. If this goes into i'm sorry, you know, i was gon na say when, when my father came here, uh from uh germany, he uh and and applied for a visa and eventually he got his green card, he had to sign away his rights to get social services. No unemployment no benefit nothing. You you want to come here, you work and make it work.

This was back in the days of the ins uh with the naturalization. I don't even know what it stood for whatever uh they don't have it anymore. Now it's all department of homeland security or whatever but uh to me, like you, say, open it up, let people come in and then let us build more homes easier more easily, so we don't have a housing crisis at the same time. How long? How about the economy explode totally like there's 70 000 afghan allies.

We have waiting for visas hiding from the taliban right now. We literally have tens of thousands of people who couldn't be more wanting to be american, couldn't be more loyal to our country, risking their lives. To fight the taliban for us and they're waiting in refugee camps, hopefully to get in because of red tape, but i can't find anybody to build anything. No, it's it's so bad.

So the democrats have failed this country. You know i work super hard to try to help win this election. Personally personally, like work super hard to help by then harris win this election, and they have let me down. They should be letting these people in left and right.

Okay, i mean just this whole administration. They blew this build america back better plan because they're pandering to a bunch of progressives that are so stupid and regressive with the policies that they want to bring america back to an age where we were poor and, like biden, doesn't have the cojones to go out And say: hey, you know what aoc i like you and you're smart, but you're young and you're wrong. Okay! This is not how you build a country. I want your help but you're not right.

I'm 78 years old - and i know a few more things than you. Okay, but aoc is a very smart woman, but she doesn't know what she's talking about okay, and so it's like it's time that leadership lead now. So i i uh honestly, i mean i couldn't agree more with you, the extremeness that we're getting out of uh the elizabeth warren the aoc is is is punishing to uh to to entrepreneurs. It's punishing people who want to start a company to people who want to prosper.

It's it's uh, you know i. I did a financial breakdown on aoc and then we'll get off the political stuff, but i did a financial breakdown and you know she's always funny losing subscribers uh. Whatever uh, you know, i um she's cheering cancel uh, cancel with it, cancel student loans and uh and and then you look at her financial breakdowns. She basically has no investments, she's been in congress, you know for for two years, making 190 grand salary spends it on clothes of fancy.

Luxury and tesla doesn't have any investments, but has somewhere between fifteen thousand and fifty thousand dollars of student debt and all she's cheering for is: let's cancel student debt. I'm like this is this is the wrong example for america. We should be teaching work, hard, save your money, so you can invest not blow it all. On fancy, dresses and cars, apartments, right people who don't pay their taxes and then go to the met gala, which is the most stuck-up place you could possibly go.

You know it's like it's just. Have you seen uh, don't look up yet no uh, that's on netflix watch it tonight. Okay! Is that the leonardo dicaprio one yeah, you know. Oh my gosh.

I saw a clip of that where leonardo dicaprio we're all gon na die. Our administration sucks i'll, tell you i'll, tell you a story. I'll tell you a good story. I got to hang out with leo dicaprio twice in the last month.

Just me and him drinking scotch talking about climate and it's been, it was amazing. How'd. You set that one up well, i was pretty lucky because you know i'm in the big business world and - and you know one of the investments i i have in pole. Star um leo is involved with pole star because he's working more on climate issues, so leo is legit he's not what he cares about is climate.

What he actually cares about, like as a person is climate. I think i was super impressed. I was super impressed like so when i met leo. It was in like a kitchen of this guy's house, okay, and i'm with my i'm with my wife.

You know it's kind of funny and i was like leo. You know like i was like you know: jeff bezos sent me to talk to you, you know and he started laughing and uh and i was like if you took a picture with me and my wife, i'm sure it would go by you know and we were Laughing and um i didn't, i didn't bring up one move now he's one of my favorite actors. I didn't bring up one movie. We didn't talk about anything like the departed or any of this stuff.

What we talked about for an hour was climate change wow and he wanted to know he wanted to know more about evs he's he wants to do more. He you know he he was just at the climate conference, so we were talking about how the politicians aren't going to solve climate change and that actually influencers actors, business people - are the ones that are gon na - have to take the lead in solving climate by making It worth it to solve climate, and he was just doing this movie and i and it wasn't out yet and now that the movie's out and i've seen it - i totally get where he was coming from now, because this whole movie is based around this concept that The politicians and the government are so stupid and concerned about so many of the wrong things that they're not solving any of the issues that need to be solved, and this movie does a wonderful job displaying this um and it's on netflix. It's really great, but leo is a great guy. I i can only say positive things about my interactions with him.

I i think that he's one of the greatest actors of our time - and i love that what he cares about are human things he's one of the few people. I've ever met in hollywood, and i grew up here that i've ever met who's as successful as he is who all he wanted to talk about were like meaningful things. I was like i love this guy, like we don't have to talk about like we had the full combo, so you know i'm i'm really into leo now. Wow! That's yeah! That's really awesome! That's the recommendation for the movie! So what? What is it that you see in ggpi, i'm just now, i'm pulling up their their s1.

Their quarterly reports aren't as detailed as like what like i get they're delivering cars, but no there is there is no, and this is a core demo here. Okay, there is - and i know this is anecdotal but i'd love - to see the stats on it too. There's no 25 to 45 year old dude going got ta have the pulsar. That's right: that's right because they haven't, they haven't driven the ps1.

The pulsar one is one of the sweetest cars out there, so it's expensive um, so polestar has five models: they're, building and they're copying tesla, basically with a model. Three, a model y like a model x and then a model s, so they've got kind of the same idea of tesla of serving all those same markets. Um the the polestar 2, which is the model 3 version, is a pretty sweet car. It's much better than the maki.

It's a it's a very well built car, but remember these are the volvo people. Volvo was never known for being the hottest sexiest car. It was known for being a good, reliable car, they're good at building cars, and the volvo people are very understated. This is what i'm trying to help them with is to be more.

You know big and talkative like elon, so that people pay attention the poster three. I've seen because they launched it in new york. That's why i was out in new york and the pollster 3 is like the model y and it's sweet. It's sweet! So it's coming out next year, they're building a factory for it.

Um that'll, be the game. Changer product for pole, star, it's not out yet, and people haven't really seen it except for me um and it is in the videos from the event which are open to the public. So i haven't seen anything the public hasn't seen: um the pollster four and five. There's where it gets really interesting, because the four is like a model x and the five is like the model s and the points and those aren't yet right.

No they're gon na do one car a year. That's their goal is one car a year. The only reason i like pole, star more than almost every other company, is because they can deliver cars. They can deliver these cars and they're delivering them now, where lucid and rivian have not been able to and they're valued at two to three times what polestar is, but they've been unable to deliver cars.

So if you have a wonderful product, but you can't deliver it, it doesn't help you at all. But if you have a good product that you can deliver, the demand for evs and cars in general is so large right now globally that it doesn't matter they're going to sell them all. Secondly, polstar's main market is in the united states. Pollster is a european company.

Their number one market is aiming to be europe with forty percent of sales, it's owned by the chinese, so thirty percent of sales is supposed to go to china and that's the secret by being owned by the chinese. They have the supply chain for batteries. They have. The supply chain and that's why tesla is going to blow out their numbers.

This quarter is because they have a better supply chain because of china. China is the ev supply chain. There is no other path, but through china, so geely owns volvo and postal. So the chinese have every incentive to see polestar succeed.

The europeans have every incentive to see the pole star succeed. These are the people you want. They know how to make cars and they've got the supply chain and they got a stock price at 11 bucks. I'm in management's great too what so, let's touch on china there for a moment uh.

You know a lot of fears that uh evergrand obviously has defaulted. We got another big bond payment due on tuesday. You've got the real estate market. That's that's substantially stagnated.

Ever you know, you've got the politicians in china and evergreen saying: oh, don't worry, we're getting back to building the units that everybody was promised. It'll all be fine! Well, what? If it's not you know what, if we see our, we see contraction in the chinese economy. How much is that going to weigh on us? Is that going to crash our market? Here? That's a legitimate question um, so i don't want to say no that it won't because it it very well could, and since this is recorded, i don't like saying things that i might be absolutely incorrect about, especially when i think that's a possibility. China's different than the united states in that they manage their own economy and they essentially could go to people's houses, door-to-door and force them to buy things.

You know like it's like you know: it's a fake economy, it's not like a real economy. That's a open economy like what you would study in school, everything's, owned or controlled by the government, some way shape or form so to some degree that protects them from the downside, because, basically the government loses if the people lose and the government can just print more Money and the people have no choice but to use it so as long as you're not involved with that nightmare, it doesn't hurt you. The issue is chinese consumers and making sure chinese consumers have the money to buy u.s goods and what we've seen over the last five years is chinese. Consumers have been shunned away from u.s goods as part of the strategy in china to become more powerful internally and build up their own companies, for example at apple, for example.

You know they very much when we started the cell phone wars. They very much encourage chinese people not to buy apple anymore and we saw apple sale dip and then it kind of like leveled off and now they've come back again. You know so i'm not too scared about the chinese economy because of its size, depth and growth potential and the fact it's manipulated 100. So if everybody, if everybody's fine with that, then it's it's fine where it hurts is, if you're the investor in china.

That's not chinese yeah, china, china's not investable for us investors right now. In our mind, we have no chinese investments. I i would highly recommend somebody reassess their understanding of the chinese culture, because it's not about making money for shareholders. China is a communist country that believes and very much what she believes is what's for the benefit of china and, what's for the benefit of china, isn't making a bunch of outside shareholders rich right? So nobody in china wakes up and says we want to make sure our american partners make a good return too.

I would say zero percent of chinese businessmen think that way and i'm sorry, that's just the way they are. You might not like what i have to say and i don't care. I don't do business that way and i'm not in china in any way as an investor, and it spared me a lot of losses this year and so and i looked at china the other day because it was cheap and i looked at china the other day Because it was cheap and it will be a very big growing economy forever, but it's like anything else kind of like those those stocks were talking about in the the crowd strikes of the world. If they don't care about the shareholder, you won't make money and that's the problem.

Yeah companies like apple care, about the shareholder they wake up every morning. They want to make shareholders happy. They know. Shareholders run the company and they're all overpaid to make shareholders happy.

But in china they have no such desire, no mandate to do that and no historical precedence for it. So i would be very careful as an investor in china. So what about i mean really what it sounds like. What you're saying is: look china's.

It's still going to grow, it'll grow slower, but we got to watch that chinese consumer, which what's interesting, is if the chinese consumer stops spending uh. You know that that slows down the gdp in in china we're kind of seeing reports now that we're seeing credit card transactions plummet according to jp morgan. We could, with with this, going to get hit by omicron they're, going to get hit by omicron them too, but coming to the u.s strategy, isn't going to work, could do you think we could see a similar kind of weakness in u.s consumers in like q1 and And is that going to weigh in the stock market to where we basically either trade sideways uh, because we've got earnings that are missing, consumers are weak or whatever and then rates go up. Are we just going down at 2022.

all right? So let me cheer you up on this idea. Americans are nothing like chinese people. Okay, americans aren't left anything like chinese people, we're culturally every way, we're opposite in a lot of ways. What i i don't know how much you go out, you're a married guy.

You know, i don't know how much you go. You live in ventura county, it's boring! Okay, so, like you haven't been out with us. No, no, you guys are fun but like ventura county's venture account. It is what it is.

It's nice, but it's not exciting. You know so, if you go out, let's say: venice california, which is freaking happening right now, it's happening now. Granted this week is christmas, but like, if you go out in la it's packed people are going off, people are going crazy and omnicom comes. Nobody wants this.

Nobody wants to change their plans, nobody canceled their ski trips, you know and everybody's getting omicron and nobody cares and nobody's dying. You know that i know everybody's got it. I know they're all better now and it's like nobody cares.