What If Markets Reward Vision More Than Math?

A faster lap by going blind sounds reckless until you hear Lando Norris say he drives better with the delta display switched off. That’s the spark for a bigger idea we explore: acid capitalism, where imagination and shared beliefs move markets more than the neatest spreadsheet ever can.

We start with the critique that more frequent shows dilute intrigue and use it to sharpen the mission: reduce noise, focus on decision design. From there we test how narrative beats decimals in places you wouldn’t expect. An F1 franchise marked at six billion becomes a case study in brand economics. Nvidia stops looking like “just chips” and reveals its platform moat through CUDA and TSMC’s world-class execution, while hyperscalers quietly stretch asset lives to boost reported earnings. Tesla’s 20-quarter coil is not dead money; it’s stored energy that can compress a future rerate positive or cataclysmic into a single year. Meanwhile, China’s 10-year yield hovering below 2 percent acts as a simple, powerful tell for local equities.

We also dig into mispriced complexity. Spirits makers face a brutal cobweb: whiskey needs a decade, tequila seven years, and changing demand punishes inventory mistakes for an age. That’s why Diageo and peers trade near decade lows; not because the category is broken, but because time is. Pain today sets up tomorrow’s scarcity. We map one pragmatic approach: harvest option income against depressed, range-bound leaders to grind down cost basis while you wait for pricing power to return.

Along the way, we examine Bitcoin vs MicroStrategy premiums, joke about longevity supplements, and acknowledge the temptation to obsess over every decimal point. The takeaway is consistent: decide what to ignore. Turn off the dashboard that steals your attention, then do the simple, hard work and respect cash over optics, find moats that scale, and back visions that mobilise real capital.

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Chapters

• 0:00 Missed Monday, Critique Lands
• 5:30 Live Show Plans In London
• 6:50 Defining Asset Capitalism
• 7:50 F1 Valuations And Sports Hype
• 11:20 Lando Norris And Driving Blind
• 16:00 Listener Questions On Rates And Liquidity
• 20:00 Inputs, History, And Imagination
• 25:20 Nvidia, GPUs, And Moats
• 31:30 Politics, Longevity, And Sperm
• 33:40 Bitcoin, MicroStrategy, And Premiums
• 37:00 Tesla’s 20-Quarter Coil
• 40:00 Depreciation Games At Hyperscalers
• 44:00 China Yields And Equity Signals
• 47:00 Spirits’ Cobweb: Whiskey To Tequila
• 1:01:30 Diageo Cuts, Debt, And Options
• 1:12:20 Closing: Choose Imagination

Transcript

SPEAKER_00: 0:01

We are we, you, and I, I believe we are recording. And I missed a day. I told you I was going to have a magnificent weekend. I'd like to confirm that I did. I found myself in Eden Rock. I had a lunch that lasted four hours with Trader Mike. He regaled me of stories of being the card counter at the blackjack table. But ladies and gentlemen, I miss Monday. I'm on Tuesday. And I'm reading, I'm reading on I'm reading on the Twitter. There's a guy and he wrote, he's called Jedi. Jedi Pooh poop. Yeah, poo-poo. And he wrote, H H, increasing the frequency of your podcasts has seriously diluted their intrigue. You come across less funny, less inquisitive, less interesting, and more more like an old man rambling. Truly less. Less, my friend, is more. What do we what do we say to that, ladies and gentlemen? Shall we do that? Shall we shall we respond? Sorry, sorry, sorry, sorry, sorry. I'm still again until you send me messages, I'm gonna continue having fun. I mean, come on, help me, help me. What do you think? What do you think of the Jedi? I'm less funny. Okay, I don't know. Less inquisitive. Come on, I'm not less inquisitive, less interesting. I mean, I don't know. Anyway, it kind of sucks when you hear that. But for sure, and actually, it coincided. I was speaking to Gigi, my 18-year-old daughter, today. And she's like, Oh, I kind of saw your thing come up, the headline come up. She gets the email like all my sub stackers and Patreons. He said, Oh, that kind of sounds intriguing. And so I started watching it, and you were talking about girlfriends, you were talking about everything except the title. So maybe Jedi has a point. And I've taken a lot of notes. So what I do is I kind of try and take a computer log of my inquisitive mind. And so anything I read, I take a screenshot of, and then I try and come back to it and try and weave some sense, see if I can weave a narrative. There is always fear. I don't know if you hear the fear, you don't hear the fear in my voice. But you you do hear it in the chaos of the beginning. I have to just speak. I have to become comfortable speaking. Damn, I forgot to put my recorder on this. I'm determined again to get this below one hour. Started at nine o'clock. Yeah, so I have to speak before it all kind of begins to make sense and I can begin to see where I want to push. I am back in Blanc Blue. I left the ghetto today. I a point of order, a point of business order. I will be traveling to London this Sunday. And I am going to be doing a live version of a podcast, possibly this one, with the wonderful, with the wonderful Nick Searle. And I'm going to be, where am I going to be? I'm going to be, let me see this damn thing. I'm present. I've never heard of these characters. I should be saying amazing things about them, but Melo without a W, M-E-L-L-O, Mello London. I am day two. And I do not look like Richard Staveley of Rockwood Strategic. And I certainly do not look like Judith Mackenzie. Both fine. I'm sure outstanding members of the financial community. Instead, I look like the asset capitalist. And with Nick Sarrell on Wednesday, the 19th in the afternoon, Nick will be interviewing me. So if you're in London, it's at the Clayton Hotel in Chiswick. I don't think I've ever done a gig in Chiswick. There's always a first. Wow, we're on five minutes. Maybe I can try and sketch out the meaning, the deeper meanings, the layers, the layer cake of acid capitalism. A light bulb came on in my head. And I remembered a an interview I'd read with the Formula One driver, who's currently number one. Looks like he's a more than likely contender for the winning the championship this year. And it probably came to mind because I saw that Toto Wolf, who I think has about a one-third stake in the very successful Mercedes Formula One team, is looking to sell some of his equity. And again, I think we hold on a second. Let's get ready for. I guess these things don't work if I'm kind of preempting. The purported value of the Formula One franchise is quite frankly absurd. And I think marks a high water mark. I'm going to say the number. Six billion dollars. Wow. You thought football soccer clubs were expensive. In fact, I'm gonna jump into the old chat. Where's the old chat GPT? Let's ask it. Oh, actually, I've been using a lot of grok today. What? My dear friend, what is the most valuable sports franchise? Boom. Any guesses? Any guesses? Should we should we do the the drum roll? I I actually'm gonna I'm gonna ban myself from noises for a good five minutes. Noises are sounds. Results show that the Dallas Cowboys is the top Forbes NFL team. And you've got Real Madrid. Talk amongst yourselves, Wikipedia list sites, the Dallas Cowboys at 10 billion. I just I anyway, regardless, I think six billion. I was like, what? Really? Six billion? It did actually. The the FT article gave us some data that we could actually make a comparison. Yeah, there you go. Six hundred million in these are sterling figures. And the valuation is the valuation of sterling valuation. He's looking to sell five percent. Stake of five percent. So that'd be a sixth of his total uh total stake. Um the and so we're competing six billion dollars, which is maybe five billion in sterling, with sterling sales of six hundred and thirty six. And that was two years ago, and that had jumped from 546, so that was like a 20% increase, and they're and a really big jump in profits. They're making 163. What is that? 163 divided by 636, making 26% margins. So, yeah, like you'd think like you'd think three, four. Let's be generous, five times sales. So six, so say six hundred and thirty-six, say it grows another twenty percent, seven hundred and sixty-three. You know what? Let's round that up to eight hundred million. Let's multi uh put it into dollars, one one, and let's be generous, multiply it by 1.3. That's a billion. Yeah, that's how you get there. And then they're saying, yeah, we're worth five times sales. Okay. Anyway, I thought the more the the more interesting thing was this quote from Lando Norris. So um, he's a young English kid, and he seems to overthink and definitely lives in the shadow of the the the Dutch champion Verstappen, who again just seems to have a lot of intelligence, what do we call it? Emotional intelligence. But back um, I think three race races ago in Mexico, Mexico City, Norris, he secured pole. He'd been and he'd been struggling, he'd made a lot of unforced errors, and then he seemed to get his shit together. And he secured the pole position on the grid, which is very, very important given the incremental differences between the cars and their performance, it's so incredibly small. And he's he got that pole position because he was zero. I'm rounding again. I will not use three decimal points, and we will come back to that. But he was 0.3 seconds quicker, and that's quite a big deal because this is the third shortest circuit in the in the rostrum of the the places they go over the year. So it's it's really good performance. And uh he was interviewing, like in his conversation from the cockpit with his engineer, saying, even I don't know how I did that. And then he further alluded to something which kind of caught my attention. And he said, the less I know, the better I drive. The less I know, the better, the better I am. And I hope for for those of you within the 3,000 hardy souls that download the show each time, I hope you recognize that's something I say a lot. I'm not professing or claiming that I'm a Formula One driver, but I'm I'm suggesting that there are similarities in what we're trying to do. And it emerged that Lando genuinely had no idea how he did it until he actually crossed the line, until he actually got out of the car and looked at the monitors. You see, they have a thing called the Delta Time Display, the DT, the DTD. And amongst amidst his personal slump, going back going back a while, he he turned it off, he decided to drive blind the Delta time display. It reveals live and lap by lap, in fact, corner by corner. And it's telling you, it's comparing what you've just done with your with your previous best, um, with the the previous best of the contestants. Uh and it's telling you if you where you are, it's telling you if you're on pole or close to pole at any moment as you whiz around that track. And even having switched it off to drive blind, seemed, I mean, not blind, but you know, it's I mean, is that not is that not the fabled scene from the first Star Wars movie when Obi-Wan Kenobi says to Luke, who is having a a tough day in his Formula One spacecraft trying to blow up the Death Star, trying to guide his missile into the ventilator shaft, because they've discovered a flaw in the Death Star. And try as he might, a damn duct is very small, and Obi Wan Kenobi says Luke, switch off the Delta Time display. Trust the force, switch it off, Luke. And so and I've got a quote from not Obi Wan Kenobi, not Luke Skywalker, but our very own Lando Norris. The thing when I don't have the Delta display, I push no matter what, no matter how the start of the lap was, no matter how any corner was. And I guess it's because I've got no reference, and I'm always just trying to maximize every corner. He said, otherwise I just stare at the damn thing too much. And I thought, I thought to myself, that Lando, that my friend, that deserves a round of applause. And and there were and I I received there were two comments from Substack of Patreons. Jimmy was coming in saying, hey, AI cuts jobs, you know, the the title, what if AI cuts jobs faster than rates can fall? Yes, and he was per top. He's like, WTF. I mean he didn't say that, but he said, what is keeping treasury yields up? Every rule of the last 40 years seems to have been repealed. Will they ever fall again? And later on we might discuss tenure Chinese sovereign bond yields of 1.8. They kind of rose. They had a kind of a Z-score kind of day on Monday after the weekend release of consumer and producer prices, which were quite frankly a head scratcher. The Beijing reporting in terms of consumer, forgive me, I think the an acceleration and the largest year-over-year leap in consumer prices in in 20 months. Which caused the 10-year to the yield to jump to 1.8. But to Jimmy's point, I mean, like they're they're 4% in America. And and did someone wise say trade a mic? I mean, he was presenting, he was the start on at the summer camp. I don't know if people hear it heard him. And he's not alone. Very wise, very successful investors are saying they can imagine adult unemployment being 20% within the next five years, I heard one say. But is keeping long-term treasury yields up? Why are they four in America? 1.8 in China. And then there was another question. And oh my god, heavens, I've got this in quite low font size. So the I'm gonna read this quickly. It doesn't really matter. The latest uptick in volatility is a sign of the shortage of money, question mark. So if the Fed response is to end quantitative tightening, and if that doesn't begin until December, and then it's reinvesting into treasury bills, no, reinvesting into treasury bills for cash, that's going to be modest. And reserves must grow, and and if the Fed concentrates purchase at the short end, what if CPI is falling? What if long rates don't fall? Etc. etc. The Fed's announcement, stable coins, heavy treasure issuance. Oh la la la la la la. Bro, trying, trying, trying, trying too hard, maybe. And I said to you, this is like a a log of whatever's coming into my mind. I think of the podcast as being the algo. Is the podcast the algo or is the podcast the output? Not sure. But the inputs definitely are things like reading the Financial Times, XX, other financial publications, and clearly the sports pages and whatever else, a vogue. I am loving, and I've certainly quoted without attributing it in the past, a YouTube series, a channel, which is called Predictive History. And I'm not suggesting you go off and watch it. But it is a professor in China, Zhang, I have no idea how you pronounce his surname. Zi Qin, I'm gonna say. X U E Q I N. I need a glass of gin to think of Zhang Zhiquin. And so it's his class teaching, I don't know, philosophy, history seems to be civilization. And it is absolutely wonderful. And the episode I listened to, heaven's god, I think after lunch with Twitter Mike, I was like passed out on the beach at Eden Raw. I was listening, I was listening to it in my in my ears, and and I discovered a trick actually. I cut and pasted the the link and put it into duck duck goal. And I could listen to it without the damn interruptions, without all those adverse. So that was good. But it was a it was in praise, and this is me trying to get back to this point of asset capitalism. The diff it was about the conceit of modern thinking, that somehow our analytical process-driven state of mind. I mean, even at art school, you go to art school today and half the curriculum is how you prepare, process. And this conceit that we are somehow smarter than every generation that preceded us, is quite frankly wrong. And the and Professor Zhang is very uh compelling and elegant and very listenable in his dissertation. You know, and so the conceit would be look at excuse who are just listening, I'm gonna use my fingers, pyramid. The the pyramids are a wonder of the world. Some have been led to question whether they were built by the Egyptians or it's evidence of a superior civilization from somewhere out there in the universe that happened to be passing. Such is the conceit that we're better. What if the ancients were better than us? And where where that seems credible is in a time long past without computers. What do you do without computers? What do you do without pens and paper, calculators? What do you use? Imagination. And and asset capitalism is is about trying to tap into the kind of spiritual world. I mean, I I believe that you and I that we're gods. I mean, I do breathing exercises and I bust the the circuit breakers which drown the mind with noise. And and and there is a very simple breathe, simple to describe, very hard to achieve, breathing exercise. And you go into like this incredible, incredible trance-like state. I mean it does feel like you're levitating. And the chap who introduced it to me, who won double Olympic swimming medals at the LA Olympics back in 1984. Celebrated in the with Hugh Hefner in the Playboy mansion, and boy did he did he celebrate. But thereafter, I've told this story before, but thereafter, you imagine the dedication to be a swimmer. Why, that's tough. And he he did it, he achieved everything. What do you do? And you go looking for something fulfilling because there's a big void. And he he he he barefoot walked around around Egypt in 1980, probably 1985. He slept on a pyramid on the on the the the lower enormous stones. You didn't have the security that you have now. It was actually possible. And um and you know, he raised the question that hey, you know, empire and and the economies that we that we have today, the hegemon of America, the vast, vast Chinese economy, wouldn't be possible if we all walked around like me, going, I'm the Asset capitalist, I'm a god. You know, and so instead we kind of pushed all that geist, that tapping into the spiritual world, and we closed it off. And we became workarants, very obedient. That's how you create empire, and you close down that imagination, and the pyramid, God, I may as well be doing the guy's presentation. See if I can remember, but the pyramid is, and I love that the pyramid. I'm doing the pyramid, I love that. And you know, if you do an upside-down pyramid, it's like a heart. Pyramid, heart. And the pyramid is like it's transcendental. Civilizations back then, no one needs something to believe in. And they had very, very sophisticated religious beliefs. And again, it was all we were co-joined with spirituality, with something that's invisible, but maybe there. And we were trying to, the pyramids are all about, and and all of these, they're temples. And and they are not tombs for the pharaoh. The pharaoh, the pharaohs were they weren't that type of, they weren't, they weren't like, hey, let's build myself a big, like, you know, a big cock, kind of thing. Like it was like, it was a gift for the people, something that they could believe in. And you were bringing heaven, heaven on earth. That was the tagline, heaven on earth. And there was someone. They there was the original person who got the Pharaoh's ear. And with this imagination, he's like whispering in his ear, telling him how wonderful. I mean, you know, he couldn't draw. There were no drawings, there were no PowerPoint, there was no presentation. It was someone's someone's imagination. They built it from the inside out. Took 20, what, 20 years at least. And the imagination is so powerful and virus-like, that thousands and thousands and thousands of people, they call them slaves. They wanted to, they shared this vision. Heaven. Heaven on earth, heaven is heaven is heaven is a place on earth, Belinda Carlisle. Like got me in into a blind alley for a long time. So not alien technology, but contagious vision, like the telepathy that they shared like the teleph telepathy without the video monitor to to share the image. Imagination is the direct participle in the process of creation. So we're million miles away from the manipulation of data or process. The closest I can think of is really someone like Elon, Elon Musk, Mars Project, imagination, making the impossible happen. Actually, Elon, I I I I looked at the something, yeah. I I have to survey the the day's headlines, yesterday and today, and so there's always a headline on Tesla. And I brought the chart up. And I think it was Friday. I was, you know, I think it was misreported. And I Michael Berry was on his ex channel on Monday, pushing back against Alex Carr from Palantir. And again, I'm going to come back to that. What I read and what he said was jumping to the wrong conclusions. And I think I hope I hope you you agree with me that I was saying that would be preposterous to say the headline was he he was a billion dollars short Palantir. And my point to you was a good pro, and Burry is the pros pro, would not be shorting Palantir. It's a mem meme stock. Yes, it's gone, it went from what, two bucks to 230 bucks. It's completely unpredictable. And the granddaddy of all meme stocks, because again it's a an imagination, is telepathy, it's Elon's imagination. And he's telepathic in the sharing of that imagination. It's contagious. Is is Tesla. A trillion dollar meme stock. I mean I want to say gold feels as if it's become meme-like, and that's a 35 trillion memes of there are bigger memes. But I was looking, and again on the Substack and Patreon, when when I write this up and we do the essay, I brought the chart up again. And if I look at the chart, you've got to think it's going higher. But it's a decision point. And and the longer it decides, ooh, you know, I was saying to you, the um the great error of short sellers were were the people in 2020 and 2021 who shorted every new high. You don't short highs. The intriguing thing about Tesla is that you've now had and this was the point of mentioning the Tesla stock. Again, I I would steer clear of speculation there. If you think of yourself as being professional, because completely it's just punting. But I think it's I was I use quarterly data. I'll be presenting this chart, and I think it's 20 quarters where it has essentially gone sideways. Now, in in a Tesla like range, highs of like what is it, highs of 500 and lows of you know, like 125, but it's essentially it's a it's a it's a compressed channel. And it really has to, you know, 600 would really be a convincing break. But 20 quarters, and I I want to say it was the same previously, it was 20 quarters. How history rhymes, doesn't repeat, but 20 quarters between 2015, 2016, 2017, 2018, 2019, arguably 2014, where it went sideways. And then remarkably, all of the market cap accretion was achieved in one, two, three, four, five. Five in one year. One year it went from 16 to 270. Anyway, the granddaddy granddaddy of them always Tesla. And and so what has all that got to do with asset capitalism? It's imagination. Imagination. The consiving of contentious narrative, the imagination of what tomorrow might bring as opposed to the process of the spreadsheet, the process of the super super quick telecommunication line. The the need for PhDs. How many PhDs do they have at central banks? British central banks sold their gold, sold half of their gold right at the very, very bottom. Oh, the PhDs at central banks are these geniuses right now that central banks are buying lots. We don't know. Right, right. I do like that, but imagination is the doubt. I made that up. Imagination is the direct participle in creation. Um and so again, to the Jedi guy Yeah, I wasn't gonna do it tonight. I was like, ah you know, maybe the guy's right, but you screw the guy. And his meander and this is meandering. Yeah, it's there are no bullet points. It's purpose, spiritual. I'm seeking meaning. I'm trying to replace his calculations with my imagination. I'm seeking I'm seeking transcendence. I'm seeking perception beyond my experience as a human being. Maybe I'm reading too much Sartre in Hidego. But I think you and I we can go beyond the present self. Create pyramids. Reach for the possibility of no of actually knowing what happens next. Reaching beyond ourselves. Anyway, Michael Burry. Um I again, I I feel like we're going back and forward. You're like, yeah, we're going back and forward, back and forth. But I feel like we're going back and forward because I believe it was only last week I was talking to you about at university I studied. I studied accountancy and economics. A joint, I had a joint degree. And I said to you, my final honors year, I studied market-based accounting research. And there I was before Apple with these funny box boxes called computers with black screens and green font. I was studying, I was studying the hypothesis that the market was intelligent, and I was studying its ability to distinguish between signal and noise. And and we were, as a proxy for that, we were using company announcements, announcements to the stock exchange, which involved changes of accounting policy, which would impact profit, but not cash flow. It would either increase or reduce, mostly it would increase profit, but not cash flow. And the theory would say the market should ignore it because the company's only worth the company is the present value discounted of all future cash flows, not profits. Profits are transcendental again. I mean, they're not bringing heaven to earth. I mean, for the CEOs, it might be given the bonuses they can get. But it's what is it? It's it's a real it's it's the cult of religion and and and the ability to to change the message. And my studies revealed that by and large the stock price looked through it. So interesting that and and I I don't need Michael to tell me this. In fact, with Trader Mike, we were we were actually discussing it before his thing hit the tapes, before Michael Berry's thing hit the tapes. But these hyperscalers who are involved in spending what's going to be trillions of dollars, who've been cash flow financed, but such as the scale, they're moving on to they're gonna, and so it's been equity financed, but now we're beyond debt, special purpose vehicles, and lots of kind of less than transparent offshore of offshore off balance sheet financial uh microscopes. They've been extending the economic life, their estimate of the useful life of their GPUs, their NVIDIA semiconductors. They've been extending them by a few years. Let's look at that. Uh meta in 2020. Useful life was three years. Well, it's now five and a half. Google was three, it's now six. Oracle was five, it's six, Microsoft was three, Microsoft is six, Microsoft has doubled the the economic life assumption. Microsoft, really? Bill, Bill, are you listening? Amazon. Amazon went from four to six and then brought it back again a little bit to five. Well done, Amazon. Is the market seeing through it? Because Michael Burry did some back of the envelope estimates that the extension of useful life it on it lowers the the annual depreciation charge. You get that, yeah? I mean, if it's got a three-year life and it's 90 billion, then you're gonna have to charge uh 30 billion a year in in depreciation. If it's now six years, the charge against your profits halves from 30 to 15. So Michael Berry was saying they'll they'll understate depreciation and therefore overstate profit by 176 billion. Now they all trade on about 30 times earnings. So what's that? That's$5 trillion. Oh, the valuation of these things out by$5 trillion. It's a big, big deal. Oracle profits are overstated by 27%, meta by 21%. Interesting. Back and forth. We're being transcendental. And and then of course a bit of the news today was Softbank had sold the entirety of its Nvidia holding for just under six billion dollars. And and I'd forgotten, but I'm sure you you're wiser than I, but it's not the first time Softbank uh has sold the entirety of its holding because it it bought 5% of the company back in 2017. And two years later, it sold everything for 3.3 billion. And if it had held on and it was selling that stake today, it would not be raising six billion. No, no, no. It'd be raising, oh come on, we need it. Come on, be raising two, it would it would be it would have 200 billion dollars that could go and waste another AI ventures. Um I mentioned that I'm working through my notes here. I I did mention that the China inflation core CPI accelerated to 1.2%. That was its highest in 20 months. And and again, the Substack Patreon with the essay, you'll see a chart of the 10-year Chinese yield. And it moved from yeah, it moved about six basis points, 176 to 182, but quite a big move. But the if you were to push back a bit, look at it on the year to date, 11 months or so, um, it's essentially gone sideways. Start of the year, these great policy announcements, boom, you know, uh, we're gonna we're hyperscaling the equity market. Number one economic policy in China is higher stock prices. And the tenure yield went from an incredibly low level of one six to two percent, and then promptly came all the way back to 160. And then there were further announcements, uh and the stock market's been kind of catching fire, and that yield is now well was 190, and it came all the way back down to 170, and so now it's 180, blah, blah, blah. I mentioned that because I think that's one of the most important charts out there. If the 10-year Chinese can convincingly break 2% and move higher, I think that'd be a great validation for Chinese equities. And I I as you know, the there's a the notion of a model portfolio, and I think I've got a 3.5% or two and a half percent NAV position in the FXI Chinese largest companies. Not because I want it, but because I'm I'm I'm aware that I'm very prejudicial with all things China. Uh that I don't see it. If that bond yield was to surpass the highs of this year, maybe the uh the argument would be that I should raise that that that holding in in the equities. But for now, um, it's still going sideways. So interesting. Oh, the with I meant to say that again, how my maybe just trying to reveal how my mind works as I prepare for these podcasts, algos. But I was like, yeah, in the video, in the video, in the video. And I said, hey, you know, it's just you and me, digital assistant. I was like, can I ask you a few dumb questions? Can you pretend I'm 12? Kind of like, what are semiconductors? Why isn't the video a five trillion, is it five or four trillion dollar company? Because they think semis are ubiquitous. They're made from silicon and they they control electricity and they make things work. Electronically, they light up things, and there are billions of them. They're mostly basic and boring. So what's so special about the video? I mean, do you know? I mean, I don't I I don't know. I've uh so let me share with you what I what I took from it. You know, the the the GPU. I mean, just again, funny how things work out. You know, and these were now I I did know this, these were special processors uh for the video games award that made pictures and explosions, you know, made it all very, very realistic. But they really, really work very, very well for the zillion math problems that you've got to do very, very, very, very quickly. That's the GPU. And you know, the Intel, and we've we've mentioned Intel, we've mentioned AMD and how they're American and they're being promoted by the American government, and the hyperscalers need them because there's only so much Nvidia can do or can deliver. And historically, you know, Intel was in your computer, it was running your laptop. They just don't have the Nvidia speed. And again, I wasn't sure. It was like, well, how much is the GPU? It's like 30,000 bucks, probably higher than that. And then can't they just be copied? But we we mentioned ARM previously. And as you know, Nvidia is like a virtual company, almost like a software company, is and this the software is CUDA C U D A. And that that's the magic sauce with those with those chips. That's the thing that's hard for the Chinese. You can't just buy the Chinese, could obviously have the best of the Nvidia chips, you know, that the sovereign nation could procure them secretly, strip them apart, but you you can't find the secret sauce, the the the CUDA. Nvidia, we mentioned Mercedes. Is it a Mercedes or is it a Ferrari when it's like in a world of semiconductor bicycles? This Ferrari came roaring out of the video games world. Incredible. And do you know they they they spend ten yards a year? Billions of little pieces under like I mean I say ten is if it's a big number. I'm gonna I'm gonna go on and talk about DiAgio. DiAgio. And and Archer, not Archer Midland Daniels, I'm gonna talk about Brown Foreman, so the drinks industry. And they they spent that kind of money just on trying to persuade you to to drink poison. And of course, the video, they're fab less. It's the super Taiwan semiconductor. And and so even if the Intelers and even if the Chinese or whatever could crack the cuda, they can't damn make it. And the Americans, of course, won't won't allow ASML to sell those machines to the Chinese. The lithography. We all know why Softbank is sold. They're Nvidia, but go Nvidia. I'm not saying buy, I'm just saying I feel like I I know a little bit. I I feel like I can bluff my way through a dinner party if people ask me about Nvidia. And that's what it's all about. No real economic data at the last two days. Today was marred by Trump being buffoon-like, or the night before, being idiotic and reactionary, old school political nonsense. This notion of a$2,000 tariff rebate to all Americans. Households earning, what, less than a million dollars or less than$100,000? Stupid, stupid, stupid. I don't think it will happen. Talking of Trump, I was reading the FT's doing a special piece on a series, a recurring series of pieces on the longevity. Living forever, very much what I want to do. I'm enjoying life and I want to enjoy a very long, prosperous, and healthy and productive life. And so I take I take some sperm in the morning. Wheat sperm. Spermidine, named from 17th century research things been around for a long time. And I should, I mean, I do take wheat germ powder with my breakfast. Um, but I also do take some spermidine pills, which are preposterously expensive, but they have been clinically proven to extend the lifespan in in yeast, in worms, in flies, and in mice. They seem to reduce the senescence again. Did I mention senescence? It's the age-related deterioration when the cells are like uh going off, and we have this thing, apophagy? Forgive me for the pronunciation, but it's like Placman and younger the younger body, we have these Pac-Mans, and they go around the body eating off these sentient cells, making them go away. Otherwise, they just litter the litter our bodies up, get in the way. Um I'm just telling you, there's no great insight, but I guess I'm telling you that because I got the opportunity to say I took sperm in the morning. Jim Chanos, more interesting, talking about talking about sperm and Michael Sailor. Uh you know, the I'm hesitating because well done, Jim. Well done, Jim. I presented on stage with Jim one year in Miami, I think, on the Chinese economy. And he's Channels', I mean, he's retired, but he's clearly, I think, family office his own money. And he has just unwound his short on a micro strategy. The premium in the micro strategy valuation versus its holdings of what 650,000 bitcoins has fallen from two and a half times, and I think we're down to about one point one point one. It's all gone, Michael. It's all gone. And again, it just meme and how I mean that was neat because you could and yeah, I was lamenting George Gamon with his very, very successful short on Carmax and his pair long against the SP. And I was lamenting that there was so much idiosyncratic risk, so many things that could go wrong, where you you could actually lose money on both sides of that pair trade. Whereas this was safer that the performance, short-term, medium-term, long term, between Bitcoin and MicroStrategy would be very, very similar. And therefore, the the notion of the premium being unwound seemed correct. Amazing how we've seen this. You know, we we we saw this in the grayscale. It was the only way of playing it, and Bitcoin was going up, and people were rushing, and people would take no for an answer. They wouldn't take no for an answer, and and that premium went from what 1.6, 1.7 times all the way down to like I think a 50-60% discount to NEV. I I support Sailor in that I think it was the right thing to do. He's a huge shareholder in strategy, and he was able to buy he was able to increase his personal holding in the Bitcoin funded by foolish investors. I say foolish because why on earth would you agree to pay two and a half times? And the most preposterous reason cited. Keep it simple. People transcend it, be transcend the nonsense. That's what I say. And of course, so many ways, so many ways to play Bitcoin. I mean, you know, the Black Rock ETF. Why, why, why, oh why would you would you buy a strategy? So well done, Jim Chanos. Because I've got the position in the or I'm liking the the notion of a a long breakout. So again, a long breakout. I'm talking about charts, and I had mentioned Tesla, and I said that we've now gone sideways for 20 quarters. And Tesla kind of does this, and then it breaches that and it and it explodes. It's not guaranteed to explode, but it did explode and it became the most valuable, overvalued car company in the world. Is it going to break out again to the upside? Or is it going to break to the downside? The suspense is killing me. But 20 quarters, it would seem. And 20 quarters, plus for the pharmaceutical sector, that when I started my career, these were the most decorated, the most celebrated growth companies in the world. And now they're almost value companies. Except, of course, during the awful, awful pandemic, when you were either for, you were either pro-public policy or against. I was very much against. But Pfizer, of course, played that game very, very well. And so it feels kind of it feels like nothing, but it's the redress is that Pfizer's market cap has fallen by a fifth of a trillion dollars since then. Take that, Pfizer. Aided and abetted by a proportionously silly, well, overvalued acquisition. So Michael Saylor was I mean, at least he was taking his overvalued stock. I guess you could say actually Pfizer too actually took its overvalued stock at the end of 2021. So actually it's very that's this is a coincidence, but it's very, very similar to Saylor and strategy. They took their stock inflated with the nonsense of COVID and the vaccine. And they they sold lots of it. They sold 40 yards, 40 yards, I think. How much did they sell of it? How much did they sell of it? How much? I'm asking myself, they yeah, 43 billion. Um, and they made this acquisition of a of a uh an existing pharmaceutical stock called CGN. They paid 21 times revenue. And I mention it because the cheap boy, they've just outbid Novo Nordisk, the Ozempic manufacturer, the weight loss. The European challenger to Eli Lilly, which is the the king and the queen sitting on the throne. And Pfizer internally could not make their medicine work, and so they felt obliged and they've come in and they've they beaten Novo Nordisk and they they've bought another group for 10 yards. And so that kind of raised that that I kind of thought, ooh, what are they up to? Because you know, they they they tend to overpay. And the chief executives, it's the same guy's called Albert Burla. What did he say? He had a great line. I I love acquisitions because it's revealing, and it's very, very frustrating when they don't give you all the information. The newspapers like, we want to know what did they pay EV to sales? We want to know what were the last five, ten years of average EBIT margins, you know. Um but what did Albert say? He had a he he he must be a character. It was reported as his comments were candid. I am over a nervous annoying. Uh in candid remarks, Burla started, stated, if the whole thing, but if the whole thing fails, then we overpaid. If the whole thing succeeds, then it's a fucking good idea. That's what he said with the C gen deal. I'm not sure it was a he still maintains it was a great deal. I yeah, I don't know. I don't know. The share price has come down from 60 to 24. And you can buy Pfizer at the same prices that prevailed, I think, in 1997. What he was buying was seizure, and I thought, well, let's look at it. He was buying, and again, I'm I'm just sharing my knowledge with you. Take it as you wish. ADC antibody drug conjugates. He was buying magic bullet medicine. They definitely need a magic bullet for that share price. So the antibody. Forgive me, I'm still on the 12-year-old's infantile mind, but the antibody is like this. The days of Taunton and the Indians, and we're cowboys, we're we've got our scouts, we're out there ahead reporting back, and they're the special proteins, and they can spot cancer cells. The cancer cells have got kind of weird flag, flags or markers, which healthy cells don't have. And so the the scouts, the antibody sticks, sticks to the bad cells like glue. And when it's stuck, it then zaps up. Some poison, which hopefully kills so at the at the cellular level, kills the cancer like a tiny bomb. And the conjugate, what the hell is a conjugate? Conjugate's the rope, you you're uh tying the scout and the and the the the weapon together. Kind of kind of cool and kind of neat. And of course, it's better than chemotherapy. But is it worth the hype? I mean the doctors love it because you know it is targeted, but it it may be targeted, but again, you've still got safe dosage kind of issues. It can be hard to even the scouts can find it, it can be hard to penetrate the tumor. And again, like the dosage, dosage and penetration are issues, and then they're friggin' expensive, they're really, really complicated to build. Really, really complicated. So I hope they work, and then it'll be what honor these again. A fucking great deal, but so for all the for the the rise and rise and rise of the Nvidia's, there are visors and Merrick. Merrick, Merck is kind of share prices trying to stabilize. I hope I said to you on Friday that trader mic when it's covered coals, he's looking for great one-of-a-kind businesses that that have had a glitch. They've fucked up because of that. And they fucked up, again, forgive me, at a point where they were really loved and therefore overvalued. And so the penalty is extreme, they fall 60%. And even that's not good enough for Mike to come in. Mike, you know, we're talking about those quarterlies of going sideways and the like. Mike needs evidence that he's not buying a falling knife. And so just two companies, Merck and Pfizer, you were looking at the best part of half a trillion dollars, just two companies which have reversed as the hyperscalers obviously have added trillions to their market capitalization. And then I thought I'd close on the story of D'Agio. Sounds like a rapper or it sounds like a soul singer. They make Johnny, Johnny Walker whiskey. Casamigos, my friends, the tequila, and of course, Guinness. And it's another one where the market cap. Now they're not the size, their market cap is what I want to say. I think it's 40 billion dollars. You got 20 billion dollars of debt, which is a bit nasty. And I'm not just talking about DeAzhu, I'm talking about the Spirits companies. Berno Ricard. They make vodka absolute. They bought that. Uh in America, our very own Brown Foreman, Jack Daniels Whiskey, my brothers and my sisters. I never got the chance to say good evening, brothers and sisters. Let me correct for that as we reach the zenith or the end of the show. Collectively, the share prices are at 10, 15 year lows. It's still dropping. I mention it because Diageo came across the screens, I think, yesterday. They've got a new chief executive, and his nickname is drastic Dave. And he's drastic when it comes to cost. He's a slasher. Now, if you recall, I did mention whiskey. I can't remember the context of which I was discussing this. I was telling you that I think yes, I it was the context of Carmax and where they're ex where they had been caught out by the bringing forward, the renting of future demand and bringing it into the present to beat tariffs. The tariffs would lead to an almost certain rise, which could be a household additional cost of five or ten thousand dollars as they sought to replace the family car. And so better to replace sooner rather than later and avoid the tariff-induced inflation. And that through Carmax's plans and its planning of demand and supply, it got it all wrong and the share prices collapsed. And I gave the example, I said production planning, planning and trying to see the future is a challenge across the universe. It's tough being like an easy business, forgive me. And I know that's nothing is easy but toothbrush, toothpaste. The lags are modest, the demand is constant, and even then the production is hard. And I was can I was contrasting that with the drinks and especially whiskey. Whiskey's hard. Ten years. You're gonna make it, and it's gonna sit there for 10 years before you sell it, and that leads to huge, huge supply issues. And we were discussing the cobweb theorem. And so, you know, imagine you're a farmer and you grow, you grow whiskey. Maybe I should say you grow uh barley, but you grow whiskey. And and the whiskey, it takes the whole summer to grow, and you plant the whiskey seeds in the spring and you harvest in autumn. Now, if the whiskey is selling for a high price, you go, Wow, I'm gonna plant a lot more whiskey next year. But the thing is, all the other whiskey farmers they do the same, and so when you come to the harvest, there is too much whiskey, and the prices crash. And then and then people regret the the whiskey farmers regret their behavior and they plant less. And you repeat this in into infinity, and so it's kind of you're kind of blowing a spider web. It's a spider web blowing in the wind, not a candle in the wind, a spider web. That's the cobweb theorem. Businesses are having to make guesses based on today's prices, and it causes big ups and big downs. And for the spirit companies, oh my god, have they again let's use the F-bomb, have they fucked up that 10 years to age in the barrows? And and of course, what happened? Well, a few years ago, more than a few, I guess you go around to around about 2010 with China booming, they started buying fancy whiskies and what's that awful? It's like a whiskey. Covassur. Brandy, brandy, yeah. Gifts, gifts of ostentatious, ostentatious gifts to say, oh look, we're doing really well, or to bribe people and to look good. And and so the the consumption and the prices you could achieve were off the charts. And what did the what did the whiskey cup, what did the drinks companies do? They they produced a hell of a letter. They're like this gonna last forever. Same thing. And this has been an extended fuck-up because in between, because you know, then China is like the it starts to go, holy Moses, we kind of got the China thing wrong. Then COVID comes through and everyone's stuck at home. You can't go to the bar unless you're in St. Bart's, the bar's closed, and so you're like on Amazon and you're ordering fan. You can't actually order drinks on Amazon, you're ordering fancy, what do I mean fancy, expensive premiums? Yeah, we'll take that sales boom, and to make it worse, they go and buy each other at preposterous pfizer-like C gen valuations. Tequila, everyone's drinking tequila, me included. Tequila grows, it takes you seven years for the agave plant to grow. So a bit better than the whiskey, but still, seven is a long time. Vodka, you you should just stick to vodka. Vodka is like lemonade, no aging. Uh, you don't have the cobweb theorem. All the problems lurk within the whiskey. You're really whiskey-dependent, guys. Brown Foreman. Oh my god, Niger Prize has has absolutely collapsed. I actually came across another one. I'm gonna have it's I I'll show you its share price in the Substack in the Patreon. MGP. MGP. I love discovering new companies. MGP makes is a barley. It makes it makes the the the raw material for the whiskey. Sales down 19%. Stock trades on like four times earnings or something. Share price has gone from 130 uh to 25, and it's come, it had a it had a ceiling that became a trampoline, and then the trampoline would come all the way back down to the ceiling. Interesting. But a microcap stock, we're talking like half a billion dollar uh market capitalization. But you know, Brown Foreman lost two-thirds of the market value. The whole alcohol industry has has dropped a trillion dollars. So again, Nvidia, alphabet, microsoft, et al meta going higher by trillions, and not a zero-sum game, but you know, coming back. And the problem you have is so you you you're starting making the stuff. You know, the far the whiskey farmers like, okay, less planting, less, less, less, less planting. But you've got all that surplus in in your bonded warehouse. So the production is down like between 20 and 30 percent. But you know, you're not gonna see you're not gonna deal with the the surplus. You need years and years and years to deal with the surplus. Uh and then with those EPIC, people are drinking less. The Gen Z are drinking less, apparently. I mean, I don't know if I'd believe that every Gen Z I see is drinking as much as I am. I mean, I'm drinking less. I'm drinking less. China's still not booming, regardless of what those inflation figures were saying. And I I read and I didn't know this. The US government was proposing putting like a kind of carcinogenic warning on on spirits. Have you heard that? I I'm not I was not aware of that. Um, anyway, that's the glitch. That's the glitch. And you know, you you saw this, it repeated itself. It's well, we are repeating the past. When Japan was China, you know, the glorious 1980s, the share price performance of whiskey companies were on fire because you had a decade, it takes a decade to correct. And you had scarcity, and so you had pricing for a decade and huge demand. So at some point, we have to keep these on our radar. But because at some point it will turn. This is the pain now. Now, drastic Dave, I think the De Azure share price was up 7% today or yesterday. Cutting costs, I mean, I would you yeah, I don't care his reputation. I mean, he worked at Unilever in Tesco for Christ's sake. Yeah, Moses. It's the second time I mentioned Moses. Getting all biblical. I would I would have no enthusiasm for what one man can do. One man needs probably another five years. But and the stock, I mean, Diagio is gonna cut its dividend almost certainly. It's got debt, which is 20, 50% of its market cap, which is never good, it's ugly. So you're looking for them to cut their dividend to fall further. And unfortunately, the ball will never be that high. But there'll be a point where they're so low. If you buy a stock down 60, 70%, trading at 20-year lows and it goes sideways. What does that sound like? That sounds like Nokia, Ericsson. The Nokia was high, if the volatility was high enough, you could just sell weekly expiring calls, kind of at modestly just off at the money. And do that weekly. Maybe you only maybe you only get an income of half a percent per week, but do that consistently. And in three, four years' time, maybe your your absolute in price for the for the stock you buy will be nothing. And then when the cobweb turns, boom, baby, you will be, you will be a winner. So there you have it. Today was very we did trans with transcendental asset capitalism. We've examined some economic theories. We've in the apps, oh the the government is reopening. We're gonna have government data, but we're gonna have government data, and we're gonna have decimal points. But what do we need? Say it after me. We need imagination. This has been your nightly, weekly shot of imagination. Um this week I think we're on two, two at most. Maybe the Jedi is right. Write in and tell me if he's right or if he's wrong. My brothers and my sisters, I am Hugh Henry. I am the asset capitalist, and I very much believe that I have brought heaven to earth, and we've called it Blanc Blue and Saint Bart's, and I'm gonna have a joyous sleep tonight. When you receive this show, receive it with my my immense gratitude. Until the next time, good night, good morning, good afternoon.