The Compound and Friends
00:43:45 · Daniel Clifton, Josh Brown, Michael Batnick
[00:43:45] S1: And it didn't work. This wasn't about money. Most of these people won without money. [00:43:49] S2: That's another interesting aspect. So I've conditioned myself to believe, like between social media networks, whoever controls them, and super PACs. Yep. Like, basically, it doesn't matter what anyone wants. That's not true anymore. [00:44:04] S0: So that's a win for everybody. [00:44:06] S1: Yeah. It's [00:44:06] S2: So I like that. [00:44:07] S1: Yeah. It's a... And that... But he doesn't. His stocks were not moving. Like, we literally have stocks that can tell you what's gonna happen in the election. The market is just so much smarter about the election than the polling and the and the betting odds, And his stocks never reflected that. Then all of a sudden, Texas went, which again was unexpected in the consensus, and it just dropped because Starbase is now being controlled by Democrats. Okay? And there's going to be fewer data centers. [00:44:34] S2: I think the Starlink problem is going be a big one, too. [00:44:37] S1: So, if we know that, the President knows that, Elon knows that, Elon is way ahead of me in terms of thinking through, there's got to be a reaction function. Trump believes that these data centers are needed to compete with China. And it's a national security issue. My guess is the president's going to figure out how to find federal land. And I don't mean Yellowstone or, you know, the Grand Canyon, but finding federal land where he could start putting some of these data centers. Where? You you got to do an inventory of it. Like, worked in the
00:44:37 · Daniel Clifton, Josh Brown, Michael Batnick
[00:44:37] S1: So, if we know that, the President knows that, Elon knows that, Elon is way ahead of me in terms of thinking through, there's got to be a reaction function. Trump believes that these data centers are needed to compete with China. And it's a national security issue. My guess is the president's going to figure out how to find federal land. And I don't mean Yellowstone or, you know, the Grand Canyon, but finding federal land where he could start putting some of these data centers. Where? You you got to do an inventory of it. Like, worked in the [00:45:06] S2: Oh, like, in the next two years, like, outrun the clock? Yeah. Like, why would [00:45:10] S1: you not do that? Like, if you got open land, they were going to do it for housing. So I think they've already mapped this out. They were going to create these land places to increase the supply cost. [00:45:19] S2: So there are no there are no voters. There's no voters there. [00:45:21] S1: Right? And that's the transition to what Elon really wants, and that's put them [00:45:25] S0: in space. [00:45:25] S1: Right? He he's basically No. [00:45:27] S2: They're saying underwater now. [00:45:28] S1: Oh, underwater. Yeah. [00:45:29] S2: Yeah. Put them deep deep underwater. [00:45:31] S0: The xenomorphs hate data centers. [00:45:33] S2: Hate them. All right. So you would agree though. This is like... You go back to three hundred years of American history. We've never seen a single person take this much of a nosedive financially as a result of one midterm election. Yeah, absolutely.
00:45:33 · Josh Brown, Daniel Clifton, Michael Batnick
[00:45:33] S2: Hate them. All right. So you would agree though. This is like... You go back to three hundred years of American history. We've never seen a single person take this much of a nosedive financially as a result of one midterm election. Yeah, absolutely. [00:45:50] S1: Okay. Right? Mean, else would you see it? [00:45:52] S0: 110,000,000,000 in space. Let's [00:45:54] S2: do chart, John. Let's do chart two. This is Daniel's. This is S and P 500 corrections and one year following correction performance by presidential cycle. What jumps out? Or what are you showing Yeah. The people that you talk to about [00:46:08] S1: I the wake up January 1 of a midterm election year nervous because I know something always happens in a midterm election year. 2022 was the Russia Ukraine war. 2018 was Trump's tariff war. And like two days in, Trump was like invading Venezuela. By the way, went excellent. But what you see here is that the average inter year decline is usually much lower in these other years. I don't know why that says '17. [00:46:32] S2: Would've done... So I would've done red bars on the bottom to represent the decline and do green. I gotcha. Okay. [00:46:39] S1: I will I will visually change that. But what this shows you is the sharper the decline, the bigger the bigger
00:46:39 · Daniel Clifton, Josh Brown, Michael Batnick
[00:46:39] S1: I will I will visually change that. But what this shows you is the sharper the decline, the bigger the bigger [00:46:45] S2: way up. This is super... I think this is super helpful. I think we we should, like, rerun a version of this and and show this to people because this is what everyone who's in the throes of... I don't know. We don't know how deep this is gonna go. It always feels bad. But people wanna have some sense that, like, there's a way out of this. Absolutely. Okay. I love I love this chart. [00:47:03] S1: It's lots of examples of you... Like, in in August 2010 during that midterm election year, people were literally talking about the second coming of the financial crisis. Of course, that never happened, but it felt really bad. And of course, by Labor Day, the equity market had already turned. [00:47:21] S0: But can't there be a world where in a week or two from now, we're like, wait a minute, guys. The free cash flow that we were getting all upset about with Meta and Microsoft and Google, it's going to go right back up. [00:47:31] S2: Still coming back. [00:47:32] S0: So think about Whether they like
00:47:32 · Michael Batnick, Daniel Clifton, Josh Brown
[00:47:32] S0: So think about Whether they like [00:47:34] S1: Think it or about sitting in a client meeting with me, and I'm like, Meta is a great Democratic stock. And people look at me like I'm crazy. Mark Zuckerberg, Democrats, right? But the market's always been more worried about Meta's cash flow rather than the other ones because there's no cloud revenue to back it up. And Congress is going come in or state government is going come in and say, oh, we're going limit data centers. I'm now putting handcuffs on the ability of Mark Zuckerberg to spend. And as the Democrats' odds of sweeping go up, Meta's stock started going up. [00:48:03] S2: Yeah. Cancel your... Well, they have commitments. So a limit to how much can really be canceled. Yeah. I agree with that. And Meta is both a user of other people's data centers and also building their [00:48:13] S1: own. Yep. [00:48:14] S2: There's sort of a weirder story. I think the right stocks to pay attention to are Microsoft Yep. Amazon and Google [00:48:22] S0: Yeah. [00:48:22] S2: Which are the the numbers one, two, and three. Yeah. Clouds. And those stocks are barely down today relative to [00:48:28] S0: Google's barely down. It's down 1.7%. [00:48:29] S2: So so the message there, the best I can come up with, tell me what you think. Okay. If we're gonna build less compute than those who have compute are sitting on something that's more valuable today than it was two days ago. Absolutely. Okay. Absolutely.
00:48:29 · Josh Brown, Michael Batnick, Daniel Clifton
[00:48:29] S2: So so the message there, the best I can come up with, tell me what you think. Okay. If we're gonna build less compute than those who have compute are sitting on something that's more valuable today than it was two days ago. Absolutely. Okay. Absolutely. [00:48:42] S0: And one other. One else. Doesn't it also tell you that AI was a legitimate threat to search? Because Google's barely down today. And a week ago, we're like, oh, shit. Like, search missed estimates for the second quarter in a row. Sell the shit out of Google. [00:48:55] S2: Before we move off this topic, put that one up too. [00:48:58] S0: 25. [00:48:58] S2: Yeah. So this is sort of our own version of what you were saying. Yeah. This is Oh, yeah. S and P returns six months after each midterm by party control of congress. What's the what's the takeaway here? [00:49:09] S0: This is Charter. I'm not the poll... Political analyst. Dan, what's the takeaway here? [00:49:12] S1: Yeah. So it's it's the same thing. I don't like six months because I think we'll be in the middle of a budget fight in in... When we get there. But, like, literally, the market prices in the bad news before the election. The election has always been a clearing So... [00:49:25] S2: But just on the right side of the chart, this looks at nineteen fifty, fifty four, fifty eight, and it's... The... It takes the stock market six months further. And the message here, don't get mad at me, the average for a Democrat midterm a party control change. [00:49:43] S0: It's cute. It's...