00:12:56 · John Coogan, Jordi Hays
[00:12:56] S1: Showed that it's possible. [00:12:59] S2: Yeah. But we were listening to a talk yesterday and the the individual was basically saying, like, we're entering the era of stock picking. Oh, You could basically just buy anything over the last year or two Yeah. And do quite well. And maybe it's time to buy the dip because almost everything is traded down. Yeah. But you gotta pick the right ones.
00:13:26 · John Coogan
[00:13:26] S1: Yeah. I mean, that that that was the same, like, the stories that we tell about the storied tech firms, like the the really successful venture capital firms of today, all were in, no coincidence, like Google, Amazon. Right? They were in the right place through the dot com crash. So even if you wind up in a in a total reset of the market, you would you would definitely expect that there's a couple new effectively hyperscalers that make it through. Daniel Newman had this very interesting visualization of .com versus AI, tracks very closely and then gets crazy at the end. Let's pull this video up. But while we're pulling that up, let me tell you about Cisco. Critical infrastructure for the AI era, unlock seamless real time experiences and new value with Cisco. I'll pull up .com versus AI. It looks identical for a minute. And .com there is on the top. The orange line doing well. Crossing, they're going back and forth, going back and forth. And then here we are today with a sell off, and then .com keeps ripping. Look at that. So from start to finish, .com produced something like... What what... What's the final? The final tally is a 100 something x, 151 x. And at the last close, this AI peak is at 16 x from the baseline. Depends on where you start the baseline. But looking at the... Some of the Korean stocks has been particularly crazy. I was looking at... I think it was the KOSPI over time is... Let me see if I can just throw this in because it's a it's a crazy, crazy chart. Let me see if I can drag this in. Uploading image. Here we go. The... Yeah. Pull up the the image. A screenshot from Google, of course. There's nothing better. Where else where else are you gonna go for a quick screenshot? Look look at this. The, this is the the Korean index. Complete store of value for like twenty years and then just completely vertical and then right back down who knows. Yeah.
00:15:42 · Jordi Hays, John Coogan
[00:15:42] S2: Peaked at 9114 now sitting at at roughly 5,000. [00:15:48] S1: 5,000. Yeah. Anyway... Jobs. [00:15:52] S2: We gotta talk about jobs. [00:15:54] S1: I'm just talking about jobs. [00:15:55] S2: Geiger says jobs in October came in higher than all 80 forecasters in Bloomberg survey predicted. Wow. Well, you shouldn't have been forecasting. You should have been predicting big Yeah. On your favorite prediction market. Yeah. Just kidding. Unemployment rate is back down to 4.1. [00:16:18] S1: Good news. [00:16:18] S2: I still have trouble getting excited about any jobs report just because it's just my default assumption is that it gets revised down massively in a few months. Sure. And so hard to hard to hit the gong or
00:16:34 · John Coogan
[00:16:34] S1: But we've had some good ones, and they haven't been revised negatively Yet. In, like, six months. And then we've also talked to the ADP folks and the Gusto and a whole bunch of the payroll companies, and they all match what's tracking. I think, in general, we we we can read this as a as a good thing. The really interesting thing is that there's 19,000 new manufacturing jobs. So for a long time, any time we got a good jobs report, was always like, okay, more health care for old people, more, you know, that's how that doesn't it feels important, but it doesn't feel like any big change structurally in the economy. It's just, okay, we're aging. We're taking care of our old people, which is important, but it's not a new area of growth. We're not going to look in... Look back in fifty years and be like, wow, the expansion in health care really changed That was what America was doing. Manufacturing on the other hand is a huge thing. Can unlock new technologies, new vehicles, new capabilities, new defense. Like there's so many different things that you can do. So very very good. We we we love to see it. A 165,000 jobs added in October. And the numbers... So the the economists were predicting 59,000 jobs. They got absolutely blown out by a 165 k. So the unemployment rate now is 4.1%. And the the the Fed is pricing in or or expecting another rate hike, which is, you know, fighting off inflation, but still strong job market. Good place to be in for The US economy. Said that the drop in the unemployment rate was especially notable given that the labor force participation rate, the share of the working age population that's either working or looking for work picked up last month, which is good. So what you always want to avoid is a situation where, yeah, the unemployment rate went down, but it's because no one's even looking for a job. Everyone's just chilling at home, relaxing, I guess. Yeah. Instead, people are people are entering the workforce. They're saying, I'm ready to work. I want a job. And they're getting jobs. Yeah. So it's that balancing factor that's really key. That's an indication that more people were entering the labor market and finding jobs. Torsten Slach, who I mentioned to Joe Wiesenthal at our New York Stock Exchange show, he's the chief economist over at Apollo.
00:19:02 · John Coogan, Jordi Hays
He pointed out that the unemployment rate has now been under 5% for roughly five years. That puts it just short of a record sixty four month stretch from 1965 to 1970. I was doing some some economic history research the other day about, you know, the the the GDP projections. You know, the most ambitious ones are what, like 30% GDP growth sustained over some period. That has like never happened in human history. I was looking back through like what what has been the best decade for GDP growth of any country anywhere [00:19:35] S2: the world? Peak. [00:19:36] S1: China has been 10% for a long time. That's great. What does it take to get to 20%? It has happened twice. Equatorial Guinea is one of them, and Guyana is another one. And both of those were countries that found offshore oil reserves Yeah. Where they could basically just sell them instantly and say, hey, come get the oil. You don't even have to rely on our infrastructure. You just show up, start drilling, take it, and we will tax it, and we will... And and it counts as our GDP because we're we're we're producing the oil here. So Equatorial Guinea at one point had like 99% of their economy oil exports or something. That's something crazy. It wound up being sort of a mixed bag like because it was like, you know, kind of like free money and it just kind of happened offshore. It didn't really revolutionize everything. It didn't take them from... It's not like they became Singapore, you know? Yeah. But it was good and they did... The government did get that money. [00:20:33] S2: China did peak at 15.2%
00:20:33 · Jordi Hays, John Coogan
[00:20:33] S2: China did peak at 15.2% [00:20:36] S1: For like a year or two. [00:20:37] S2: For one year in 1984. [00:20:40] S1: Yeah. But it is it is very difficult to to find a historical precedent for sustained 20 plus percent growth. Now you could say that like in an intelligence explosion, it's kind of akin to finding oil. It's this like it's this it's this like tokens that you can use for economic value. Same thing with oil. You can use to move things around. You can deploy it in the economy in so many places that if you can produce it, it's like the bullish... It's the most bullish case. But it was just funny because like it is extremely rare to find to find an example of of north of 20%. I mean, that's a huge amount of economic growth, especially for any any country that's at all at scale. It's really, really... [00:21:23] S2: Can you think about how electric it would be? [00:21:26] S1: It'd be amazing. Be... Yeah. It'd be it'd be incredible. [00:21:29] S2: It would fix me. [00:21:30] S1: It would. It would. Well, hopefully it happens. Lots to do though. Lots to deploy. Lots to unhobble. The models need to get even better and Yeah. They need to be adopted. [00:21:42] S2: If you were a hedge fund hoping to survive to get to 30% sustained GDP growth in The United States, you maybe didn't do that well this week because you may have exploded. [00:21:56] S1: Yeah. Lot of lot of headlines about hedge funds... [00:22:00] S2: They wanted explosive growth and they exploded.