Bitcoin Survives Biggest Crypto Hack In History?! | Jordi Visser

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Speaker C: youm don't think BlackRock is spending a lot of time on Quantum and a lot of time on these particular things? Of course they are. I heard that this week at a lunch where someone had talked to BlackRock and what are they going to do in the event that you've got these Quantum companies doing conferences and they're saying, yeah, we're going to be able to uh, break into uh, Bitcoin by 2028. They're publicly out there saying that now.

Speaker D: What's going on guys? We had a great conversation with Jordi Visser this week. In this conversation we talk about the Binance hack and its impact on Bitcoin, we talk about AI and cybersecurity, we go through the anthropic S1, we talk about Eli Lilly hitting a brand new all time high. What's going on with Meta, Microsoft, SpaceX and many other companies. And then Jordy walks us through, what is he looking forward to into the end of the year? How is he thinking about the macro factors like interest rates, oil and other, and how it's impacting his portfolio. And then we even talk about at the end some of the use cases of AI that we discovered this week and, and how we're putting this technology to work and how it may change your life or your portfolio. Here's my latest conversation with Jordy Visser. All right Jordy, Happy Halloween. Uh, I thought you were going to come in here in a costume dressed as Eli Lilly himself, you know, but you just came in as a smart, intelligent, uh, economist slash, uh, Manager of capital. I appreciate you being here.

Speaker C: Here to spread joy.

Speaker D: Amazing. Uh, Binance got hacked for $6 billion. Let's get right into the really serious stuff. Um, the rumors are that North Korea could be involved. I'm sure that AI cybersecurity concerns are going to be jacked up. Uh, Bitcoin sold off about 5% or so. And Binance is saying that they are going to backstop all losses by users on the platform. What's your general take away from a situation like this?

Speaker C: This is, unfortunately, this is a story I've heard multiple times, not of this size, but the amount of hackings that are going on from AI and this is the, the reality of the world we're going to live in with artificial intelligence for a long, long time. Um, I have friends that have told me about their businesses being hacked, where they've had to reboot the business, um, where it's not, it's not just coins. And again, I'm speaking specifically in, in crypto, but I remember when I did Freedom Tech, um, last month and when I was originally talking to some of the people there. This has been going on, I would say really since the June period where we've been having problems. You've seen it with companies too. I mean, I think Revolut, uh, had something go on an apparel company, uh, yesterday. You've had healthcare, uh, companies that have gone through this. So rather than focus this on kind of, it's crypto related. When you go through the story of what happened and you read it again, humans are exposed to artificial intelligence and to agents cracking into things. So if this was, as I've seen reported, um, going through an engineer's laptop and then kind of going from there. We're just at this point where the attacks are on. And the one thing about crypto that makes it easier than a bank from the application side is that obviously you get in and then the, the money's just moving. I think the more interesting story with this will be how much got frozen, how much they find, how much law enforcement gets involved, what the story is there. But at the end of the day, I don't see this as anything more than another fear, um, factor that starts with AI agents. But most of the things that I've heard from people in the last month are fears on Quantum. And so I think when people kind of get into Binance and, well, what's going to happen with Quantum, it obviously is going to force people to take some risk off in the space for a period of time until we get the next catalyst. On the upside

Speaker D: now, um, it is definitely spooky season. I have my Halloween sweater, uh, here, dad tax. Anyone knows, Kids, uh, are

Speaker C: very proud of it. They're

Speaker D: going to learn something, uh, this weekend. Um, but the, uh, reason why I call it spooky season is because people are definitely worried about this stuff, right? And the cyber security. Now, I want to talk about this from two different angles. The first is, um, if this had happened 10 years ago in the crypto industry, Bitcoin would have sold off 20 to 40%. In my opinion. It sold off 5%. That actually seems, in a weird way, bullish that you could have a $6 billion hack. I saw somebody describe it online as the greatest robbery in human history. When has $6 billion ever been stolen before? And so that is. The magnitude of this is. Almost gets, like, washed away. Like, we forget how much money $6 billion is. Bitcoin only sold off 5%. That seems bullish. The second piece of it, though, is Binance steps in and says, we are going to backstop any losses to users. So you immediately reinstill confidence in the platform. And in a weird way, it's a great marketing campaign because people start saying, hey, this is why I want to use Binance. It's because if there's ever an issue, they're going to backstop this. But they're not going to have to cover $6 billion because the stablecoin providers almost immediately froze a ton of funds. There's multiple billions of dollars that got frozen by Tether Circle, World, Liberty Financial, et cetera. And so, in a weird way, the, like, hardcore crypto ethos of these bearer assets that you control, that no one could, you know, kind of take from you or do anything, it's changing. When a hack used to happen, it was kind of like, hey, either you got hacked or you didn't. In a pursuit of this, like, safety net and instilling confidence, we're giving up a little bit of the, like, crypto hardcore ethos, which means, like, the ETFs, do they become more popular? Like, what are the ramifications of maybe the crypto, you know, hardcore becoming a little less or a little more soft? And now these backstops being in place.

Speaker C: So I'm going to go, I'm going to take what you said, but I'm going to take it a little bit of a different direction. Um, so when you make a joke or this is bullish, the reaction is. Is there. So let's put two things into context. Number one, we had Google down 13%. Okay. Google much bigger than bitcoin. Not as much bigger, but it is bigger. Um, I only bring that up because when you can have intel down 25%, when you can have Google down 13, 14%, and especially Google, multi trillion dollar company. I think the move in bitcoin, when you normalize it for what's happening in the biggest assets in the world. Let's go the flip side. I mean, eli Lilly's up 10% in two days. That's a trillion dollar company. So I think people are just going to have to get used to that. The reason that Bitcoin isn't moving as much as it did before is because the volatility is just much lower. And it's been lower than, uh, AI names all year. But let's go back to the general thing. I can remember in 1999, coming back from, uh, Brazil. This may sound funny to people, but the NASDAQ had all kinds of issues that were going on. And the NASDAQ was very similar to the crypto market. Um, the electronic trading side. I mean, there was the NASDAQ and the New York Stock Exchange. Now they're both electronic. But back then it was a very different world. And there were all kinds of issues that would happen on the Nasdaq because it was this new system, it was electronic. If a lot of orders came in, in a day, it would break the system. There were a whole bunch of things that came on. And I kind of equate this the same way for one element. We need things to happen for the system to be more trusted. My main thing now is the banks are involved with crypto. Like they're not turning around. They're involved in tokenization, they're involved in supporting Bitcoin. It was a very different world during the hackings when Jamie Dimon was saying this was garbage and you'd never be involved. They all have skin in the game now. They're promoting it to their customers. That means that they care about the security and they care to know what happened. That's the way that in the long term, issues like this become bullish because there has to be a plan in place to deal with these types of things and make it clear. So when you mention the ETFs, you don't think BlackRock is spending a lot of time on Quantum and a lot of time on these particular things? Of course they are. I heard that this week at a lunch where someone had talked to BlackRock. And what are they going to do in the event that You've got these Quantum companies doing conferences and they're saying, yeah, we're going to be able to uh, break into uh, ah, Bitcoin by 2028. They're publicly out there saying that. Now I know they want to raise capital because they need a lot of capital to get to the hardware necessary to do that. But regardless, I think this speeds up people thinking about it. And if there's been one negative with inside, I think crypto and let's say bitcoin the last four years probably was um, more about recovery from what happened in 2021, 2022 and not a lot of focus on how do we deal with the security issues going forward from Quantum. I think issues like this actually speed up the need for it. And I think the fact that the banks are involved and you've got people with skin in the game that actually have, they have fiduciary responsibilities. There's a big difference between JP Morgan and Binance. But when they're both involved in the same area and they're kind of promoting it from an investment standpoint, I think everyone has to come together. So I'm going to take the side that this is just a normal maturation process of a new technology that's going through the headaches and that these things can't happen. So we're going to have to find other, other ways to deal with this.

Speaker D: If the volatility on the downside related to a hack like this is so muted, are you worried about the upside volatility in a bull market being more muted as well?

Speaker C: Uh, no, because again my primary thing from the bull side of this, nobody owns it. And I mean I can say this a million times over but aside from, you know, the subscribers you have, some of the subscribers I have, institutional people and wealthy people are just not involved in the space. And again I've talked about this, that the only time that I think the true massive bull market occurs, number one, the technology happens and fundamentals start driving it. That's what will be next year's business. Tokenization just continues to move forward. Yet a DTCC announcement this week. Tokenization is going to happen that will lead to more fundamentals in the space. Second thing is what Stripe is seeing with the agenta commerce side is only going to grow from here. It's not even a question. The question is how fast will it grow and when will we start seeing the numbers. And I've learned this with AI. Don't underestimate how fast this can happen. If it's in a World where businesses can run it, and then competition just keeps coming from it because the deflationary pressures from these businesses that adopt it are going to be there. So I think on that front, this has been for me about innovation and technology and the combination of AI and fundamentals. And that's what I think the beginning stuff of crypto is. If we learned anything with AI over the last whatever years, you can't wait for the data to be good. We're kind of going through that with the AI trade. When the data really started being good, meaning when we started seeing the earnings, these names were already up 500%, 1000%, and now they've gone sideways for a period of four months with all kinds of ups and downs. I think crypto is going to go through the same thing. I will say one more thing on this for people as you go through it. We had a very large rally from 59,000 in Bitcoin up to around the, you know, 87, 88 area. I think going back and testing the 200 day moving average, which is what we're going to end up doing, I'm sure, and maybe even pierce below it a little

Speaker D: bit,

Speaker C: 73 to 74. Um, we almost got there overnight. Uh, I don't think people should just sit there and think that, okay, everything is fine, we went through the hacking, we're going to turn back up. This has been very correlated over the past month and a half to the AI trademark and whether people accept that or not. A chart of semiconductors now in Bitcoin has been one for one for the most part. The other point of this, which I brought up in a video this week, is a index of oil. And tenure rates has also been correlated to it. So I think we've been going through, as I keep saying in my weekend videos, it's been a horrible trading environment from anyone who's trying to sustain moves for longer than, say, a month and a half. You had to make your money in a very small window this year, in the first half of the year. And then since then it's been a lot of back and forth and just a lot of mud. And that's in all the major assets. I, uh, think we're still in it until we get a catalyst. There may be a catalyst next week with the quarterly refunding announcement, but other than that, I think we're just kind of grinding through.

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Speaker C: Mhm.

Speaker D: The hack was number nine. He's still got one left, which is probably the midterms. And then once he fires that last bullet, you're kind of like, all right man, you don't get anything left. I can come, you know, here we go. If that is true, then actually we are, I don't know, a week away from all of this noise, uncertainty, mud, et cetera, kind of just, okay, we've set in the foundation to leg up higher. Would you buy into that thesis or are you still a little more cautious?

Speaker C: So I had not, except for a small micron purchase during July or August, whenever, but during the, uh, situational awareness situation, um, in the last week, week and a half, I've made purchases in AI names three or four times, three or four days, uh, only into panic, which again, luckily, we keep getting them. But the reason is because a lot of things happen. Um, this week, last week felt like panic to me on Thursday, which is why I went in. But this week, first of all, anthropic released their S1. Uh, it was definitely better than what people feared. And you could kind of read through it and get to more than 100 billion if you want to, in terms of AR, assuming you make the leap that based on what they put in there, they're going to be telling you that the October numbers since Opus 5.5 went up. Uh, but regardless, that is out of the way. So people have been worried about what Anthropic would be. Now we have to get through the ipo, but again, that's coming soon. Oracle had an investor day. This might be the most important news point that no one seemed to mention or care about. If you asked me when the mud started. And again, for anyone who's trading, we've been in mud since September of last year, meaning every time you go up, you come back down. Every time you go up, you go back down. It's been in a grinding bull market, but a very, very difficult, painful one. You just look at the Nvidia chart. September of last year is when the capital raise effectively started. And the reason I say that is because Oracle made their highs on this massive day where they had massive RPOs, which is basically what the hyperscalers have as well. Meaning we have these orders that we're going to get in the future. The reason Oracle so important is not mentioned is this week in their Investor Day, they laid out, hey, we're not going to have to raise much money between now and 2030. Now, that may not mean much to people, but Oracle's raised over $60 billion since that, uh, September last year. People have questioned them. Their debt was the first one to be an issue. Their CDS started widening out, and this is when the mud started. So for everyone who's trying to find, like, when is this going to end? I actually think the capital raise has been a huge part, but not the capital raise in general, because the AI capital raise is going to happen. But it's been very concentrated with basically five names and they've come to the market for a lot of debt. Most of that debt was Q4 of last year, Q1 of this year, Q2, Q3, Q1, Q2, Q3 were actually declining in terms of going to the public markets. Um, you still have some going on. Microsoft did some this week. Uh, SpaceX did, but SpaceX did it through the private markets, through Apollo and an spv very different and there's a lot of powder there. So we've had this concentrated capital raise where I've calculated the numbers. You've done over a trillion dollars this year between equity and debt. That has been one of the mud issues and I think that has been the major issue with the rates moving higher. So now you have 10 year rates which have moved down this week as well. Remember how much everyone was worried about tenure rates? Remember how much everyone was worried about breadth? Equal weight S and P has ripped higher. In fact this month. People won't realize this but as we sit here, the S, M and P is about flat for the month again. But I think nine of the 11 sectors are up. And as I looked yesterday, this is before this morning, but I still think it's gonna be good. 350 of the S&P, 500 names. 350 of 500 at 70% we're up at least 2% for the month. Only 70 were down 2%. That's a 5 to 1 ratio. And that means that in a period where we were worried about breath, where we worried about rates, rates started to come down. And what happened. The names that were getting hit because rates were going higher came back down. I bring all this up because you know what's rolling off next year and I'll show all this this weekend. Um, you're going to get the tariff stuff which is going to roll off. So all of the rate hikes that were part of the PCE and part of in general, Goldman has put this out saying they expect about 100 basis point drop in PCE core next year purely because of the BAS base effects. DRAM prices have already rolled over. Not in a nominal basis but on a year over year basis. The second derivative, which is what inflation has rolled over, you're going to have gas at the pump. It's going to be the exact same thing. Meaning we had a huge spike in oil. We're at the same price in oil right now that we were I think in March. So every day that passes into March, unless we get A spike higher in crude. If crude were to go down at any point, you're going to have that flow through. The only reason I bring that up is this year has been about real rates going higher because inflation break evens and swaps have, I mean they're effectively at 2 1/2 percent. We have 10 year rates up close to 5, which means there's 250 basis points of real 10 year yields. That has been a major drag on crypto, it's been a major drag on gold, it's been a major drag on silver, it's been a major drag I think on the entire AI trade. And the irony is it gets back to Oracle because the amount of debt that these guys have needed competes with the Treasury. So I'll finish this little monologue off with the quarterly refunding announcement. This is not getting a ton of press and we'll find out about it on November 4th. So next week. There has been speculation by credible people and Citibank also talked about this as well that they could cancel supply. They've already done buybacks that didn't work. If they cancel supply at the long end and move everything to the front end, it's not yield curve control, but it is certainly an admission that they don't want the long end to go higher. And regardless of whether it's because of affordability issues for housing, because you've seen 30 year mortgage rates go up 100 basis points since March, or it's competing with AI and we just saw Kevin Warsh talk about the fact that seems like the AI trade was moving spreads widener. Uh, we've seen spreads widen. So I think, think there may be this effort to really try to bring long term yields down and continue to do it. And if we were to see a reaction for a day, we're already below the 50 day moving average for the first time in a while. In 10 year yields that could be the catalyst right there and you'd have all those events going on. So I'm getting more positive because I'm looking through this and thinking the holiday season's about to take over. I'm not worried about a bubble. So I'm believing that over the next six months, even if it's mud, you're getting good entry points right here.

Speaker D: It always strikes me as uh, when people have quote unquote bubble concerns, when things start to trade down, they think that means that it's going, uh, the bubble's bursting, it's going to zero, you know, it's going to be a 50% draw down. But actually what you want to see is you want to see fundamentals like revenue, profits, eps, et cetera, all increasing and positive beating expectations which we're seeing. At the same time that you want to see valuations cooling off which is kind of this like cool off during a bull market. That's actually when you should be most excited. Right. Because the fundamentals should provide some sort of floor where that cooled off valuation to your point is like an entry price that is more attractive than if you didn't have the cooling off period. But the business themselves, I mean SpaceX's revenue, they reported 160% year over year growth in their revenue. That is just mind boggling.

Speaker C: Mhm.

Speaker D: We are talking about Microsoft. They have 60,000 people that they have basically said do you want to take a buyout of your contract? My guess is that 60,000 number is not a number. They just licked their finger and stuck in the air and came up with 60,000. It probably correlates to some sort of investment they're making around AI infrastructure. Something and they're offsetting if we make these investments. But we have these 60,000 people, AI can make up the gap from a productivity standpoint and we're going to be closer to kind of a neutral impact to our financials. And then you look at anthropics S1 exploding growth. I mean we could go through. I have a ton of these that we could go through and you sit there and you say what are people worried about? The fundamentals are telling you this is one of the greatest kind of economic booms for a capitalist society probably in human history.

Speaker C: Mhm.

Speaker D: And people are literally talking about bubbles.

Speaker C: So um, first of all X has a huge part of this. Um, as someone who looks for news stories to cover, uh, there is no middle rationale line in my head. I have no problem being bearish on things if I see something. I mean I talked about the AM mid cycle slowdown. If we go back and pull all of the things that I was talking about in March and April but also in, I want to say a year ago today I was talking about how tech is going to have issues outside of the AI trade and we've gone through that. Salesforce.com is still down for the year now is down big. The true SaaS names have had a bad year. The hyperscalers. I mean as of yesterday this is before what'll happen today with Amazon, the four equal weight or the four hyperscalers. It was flat for the year as a group one of them was up 9%. Microsoft. I, uh, do want to expand on the Microsoft thing because I think it's important for people to hear this because this is a very important story, which I won't get into it. I've talked about this a couple times in interviews recently. The Microsoft news does not get enough press. 60,000 people is 27% of their employees. 27. Now,

Speaker B: is that a lot?

Speaker C: Well, to put it in perspective, I mean, when you have 223,000 people and you're saying, okay, 60,000, you can take a M buyout. Now, they obviously don't expect all of them to do it. They did this once before, but they did it with 8,000. Um, 60,000 is a big number. And what do you think those 60,000 people that been offered the buyout? Are they like, feel secure in their job going forward, or was this a message that this is our hope? Now you said, are they using this for money? I mean, I've run a business. I know what micro like you can go through their compensation. So let's assume it's $400,000 a person. When you add in health care at Microsoft, that's $24 billion, not 24 billion for one year. That's every year going forward unless they go hire more people. That number, if they all took it, would take them back to 2020 levels. Their revenue has grown, will have grown 70% if they just meet numbers into next year. So revenue per employee has gone through the roof. So this has a lot of issues to the government and this is why it's positive. Bitcoin. This is why I wrote a substack about this whole thing, comparing what Microsoft was doing to what was happening in France, where the common thread is going to be affordability. Because on the one side, what do employees making 400,000 have to pay in taxes? Uh, 50%, 50 plus, depending on where they live. What does Microsoft pay on corporate, um, taxes? There's an arbitrage here that's becoming a bigger story to the government because if Microsoft doesn't have to pay the same amount, you're losing receipts from this. If people don't get jobs or if they end up taking less of a job, whatever the case is, I think this is becoming a labor versus capital story that is much, much bigger than people realize because we're just entering the productivity boom. That's the other message that Microsoft is saying is they believe they can do this buyout at five to six or six to seven times the last one. What is that saying about their Expectations about what AI is going to enable their business to be like in the future.

Speaker D: Listen, um, I can talk about this from a personal perspective because we just went through this with our own public company. We have uh, done two things. A massive cost cutting exercise. Compute cost down substantially. Compute costs literally. I've talked about publicly $550,000 in M. March of 2026.

Speaker C: Mhm.

Speaker D: Per month down now 50%, give or take. My hope is hope that we're actually going to be able to get completely off the frontier. Models, run everything on our own software and models, uh, and hardware. If we do that, 97% cost savings on a token for token processing. Massive cost savings going to all of our key vendors, finance, accounting, uh, legal, et cetera. Hey, we gotta do something here. I know you guys are using the technology, so are we. Let's reorient here, okay? We mutually separated with some of our executives. Cost savings there as well. So you take basically the, you know, the most well paid people at the company and you're like, hey, can we do this for cheaper? Look at that. What we publicly said is we think we're going to save $10 million between cash equity, et cetera in this whole exercise. Okay? But that's actually to me what people will pay attention to is because it's like a headline.

Speaker C: Mhm.

Speaker D: The more important thing is we have a public company, there's 10 people there. I'm not claiming we're m. Facebook, I'm not claiming we're whatever. But if you go and you look at the product this week, there's five days in the work week, we launched five separate products or features, one every single day. And these are features that aren't like, hey, let me just put a prompt in Claude, you know, or something and you just get it. You gotta be very thoughtful about it. You're dealing with people's sensitive financial information, et cetera. But I explained to people, think about what that means. If we're launching something every single day and we only have 10 total people, including the non technical people at the company. When you extrapolate that out to a meta, an Amazon, uh, you know, right now actually SpaceX, if you look at the updates to Grokbot, they're releasing something like 50 to 100 new features a week. It's just you're cutting cost while that productivity is just exploding. I don't know what this looks like in two, three years, but you start getting pretty excited about just how productive any of these companies can be, right?

Speaker C: Yeah. And so let's Bring it back to Anthropic because I think the most important news item that came through this is that Anthropic announced in their S1 that they're dealing with basically 250 of the Fortune 500 companies. So 250 of the S&P 500. But in terms of their total expenses, which again are dominated by compensation of the anthropic portion is less than 1%. I think people have to fully grasp that if this company has this kind of momentum and they can give you insight into the adoption right now of AI and also for everyone that thinks that they're going to be able to go build data centers and do all this stuff, which I'm hearing more and more on other podcasts, I'm like, where are they getting the memory from to go build their own data center? I mean guys, come on. Like, if the banks want to go build their own data centers, that's all well and good, but if you can't get the memory, you can't do. You can buy as many GPUs as you want, you can go through this, but if you can't get the memory, where is this going to go? So I just think for, um, as you go through the anthropic thing and you look at it where people talk about a bubble, they're talking about a bubble for the reasons that you said. Oh, look, the AI trade is 20% off its highs. Some of the names are 40% off their highs. Whatever the case is, even though they're up 150% year to date, that doesn't matter. Spreads are widening. This is going on. Triple C's are up at 16%. None of this is going away. This is the one thing I will say is as much as I believe yields are probably peak now at the long end, do I think we're going down to 3% in 10 year yields anytime soon? No. And the main reason is because the capital needs are going to be massive. And that means we're going to have debt and the government has a lot of debt and so the issuance alone will keep it in. Do I think that Besant knows this and wants to control the back end? And this is one of the reasons why, if you were waiting for yield curve control, if you're waiting for qe, we're not getting QE the way that we used to in the past. It's coming in a different form. And that form to me is starting to happen because the labor versus capital debate means a lot of voters, because you know how many votes Microsoft gets? Let's assume Microsoft has a lobbyist and they're going to Washington saying blah, blah blah. Those 60,000 people have a vote. And if affordability remains this issue as it is across the globe, I just think part of the story for a new system, part of the story for how we're going to deal with this. And that's why I always say bitcoin is the purest AI trade. I believe that AI is only going to intensify the downside going forward. And if people are waiting for some bull market where it just goes up in a straight fashion every single month, I don't think you're going to get that because of the things that we're talking about.

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Speaker C: Mhm.

Speaker D: You talk about Bitcoin, isn't that well adopted among wealthy people and institutions, et cetera. We are in an echo chamber of X of everyone's using AI. I see people creating cities for their grokbots to run around and do all this cool stuff. I don't know man. If you watch the local news, they're yelling about data centers, but they're not using this stuff.

Speaker C: Mhm.

Speaker D: I heard last night, I was at a dinner and somebody said that a young person, uh, joined, uh, their marketing department and they were complaining that everyone was using AI. They felt like it was in school, they were being told, don't use this stuff. How do you square that with if we're only 1 2% adopted, there's 98% of people left to go.

Speaker C: I'm not sure that, um, until Muse is around for a long time, there's two issues with AI that I think are very different than, say, Google search. Um, one is the trust factor. Uh, I finally got the chance to meet William Mugayar yesterday, and his whole book is on this concept of trust as an asset. Uh, he wants to come see you again. Hasn't seen you in a long

Speaker D: time. He can come sit in that seat whenever he wants.

Speaker C: Okay. You hear that, William? Um,

Speaker D: look at this guy, Jordy, uh, asking me live on the podcast.

Speaker C: I'm a live agent. Uh, I'm a big fan of William, but I'm a big fan of his concept of this issue with trust. And I think, obviously people in crypto understand this part of trust. Now we have a hacking and binance, so trust goes back down, but individuals don't trust AI either, and they're not going to put their information in Muse, especially when you hacking. So hackings equal. I don't want to trust anything. Hackings are going up constantly. So I think that means adoption is going to be very slow for individuals. I don't think they're ever going to pay for it, ever. Um, I think they're used to having free things, and I think you can use the best AI models. I mean, I know people now in my life that have used Grokbot to do some things I told them they could do. I didn't know you could use Grokbot without paying a lot of money for a month, because I already do. I don't keep up on what's free, like, what becomes free. But the models keep getting better, and the free tier keeps getting better and better and better to where you can do all these things. Where it hurts is for younger people that are not embracing it, that are not using it. They are going to have trouble getting jobs. It's just a reality. There's no way that you can compete in today's workforce without being efficient. And if you think the company that's hiring you, you're like, oh, great, I found a company that isn't using AI, that isn't forcing me to. That company's not going to be in business very long. And that process is going to start. In fact, I'll go back to the triple C. Triple C. So companies that are junky, junk, junk, their cost of borrowing is now 16%. Now, some of that is the rise in 10 year rates. But a lot of that is the spread widening 16%. That's how if you're going to borrow money at 16%, you need to see earnings growing at some fast pace to justify that. And I know one thing that is a really hard bogey to beat when the S and P is only up 10% or 11% year to date. So I don't know what people are doing.

Speaker D: All right. I joked in the beginning that your Halloween costume should be Mr. Eli Lilly himself. Uh, I don't think there's actually an Eli Lilly, but um, all time highs up 10% in two days. Uh, you sat in this seat a couple months ago and said that one of your big bets for the AI trade was Eli Lilly. You've talked about Toon Lab, you've talked about them acquiring a lot of different companies. You've talked about them building out their own gpu, kind of cluster or data center, et cetera. How are you thinking about Eli Lilly today? Has anything changed in your thesis? Have you become more bullish?

Speaker C: First of all, the numbers are stagnant. Um, I challenge anyone to just go into an LLM and say, hey, can you give me the earnings details from this quarter for Eli Lilly? I mean, you're talking about revenue growth, revenue. So to give people an idea like good revenue, the s and P500 right now revenue growth is about 12% and that's probably where we're going to finish, which is less than it was in Q2. Eli Lilly's revenue growth year over year is 40%. Um,

Speaker D: $24.4 billion. Let me just read some of these. These are so crazy. So Eli Lilly reported revenue of $24.4 billion, up 39%. The expectation was 22.6 billion. So they outperformed expectations by $2 billion or almost 10%. Their volume grew 53%. Prices, uh, are down 15%. Gross margin was 83%. Non GAAP EPS was $7.48 against a $6.26, uh, cents. So they beat non GAAP EPS by over a dollar. Pretty incredible. And uh, Mounjaro brought in $10 billion which is up 65%. And Zip Bound brought in $5 billion, was up, uh, 50%. And then they basically look at their 2026 revenue guidance rose. They think that it's going to be 91 to $92 billion where previously they were reporting 85 to 87. So somewhere in the ballpark of 6 or $7 billion, additional revenue guidance and uh, about. Yeah, and so they're growing at, you know, $90 billion run rate, they're still growing revenue at 40% year over year.

Speaker C: So let me give everyone, um,

Speaker D: felt like a statistician there.

Speaker C: Yeah. And again, I've said that I believe in the next five years they will become the biggest company.

Speaker D: Oh, I know,

Speaker C: okay,

Speaker D: I know you've said that.

Speaker C: So right now they're number nine. So everyone knows like this is not like some outrageous thing. And they're catching up to number eight and number seven very quickly here.

Speaker D: Maybe we need like a science fair board and we just, every week we just move them up. Okay, where's Eli?

Speaker C: They could be ahead of Meta soon. I mean there's, it's Tesla and Meta are staring in front of them. So they're a drug company. Here's the thing I want people to think about. So Nvidia's stuck In mud, their PE has collapsed. Um, they announced 70% revenue growth. Their PE is down at 1312. Who knows? Does

Speaker D: that make you more bullish on Nvidia?

Speaker C: No. And here's the reason why. There are two things about Eli Lilly comparing them to Nvidia that are very different. Number one, the great thing about Eli Lilly, in this world of AI infrastructure trades, they are making money on the health care problems in the United States where the spending is guaranteed every year. It is non cyclical. So they've historically, because they didn't have these growth numbers for a pharmaceutical company, are insane. Now most of this is, is related to obesity. But the penetration that they've had, remember this has been an injectable. Now they're moving to an oral. They have about 10% of people, from what I saw on the thing diagnosed with obesity in the U.S. they've only penetrated 10% at this point, which means they still have a lot of room, especially with pills. The prices are going down, their volumes are going faster than their price decline. You love to see that. Uh, I think they've called that Jevons Paradox, I don't really know. But as the price goes lower and more coverage happens, go globally, that was just the U.S. numbers, but globally they are less than, I think 3%. I think it's 2% of the global. So they still have more money from that. And that's where most of the growth is coming from. But when you go through the other areas like dementia, oncology, immunology, they've got significant revenue growth there. And what people have to understand is it's one thing to be dealing with just obesity and diabetes, another thing to have this growth area that is also there from all of the drug discovery that they're spending time on. That stuff is going to be down the road. I love having call options if they come up with some cure on something. What happened to Moderna when they came through with something that's still up for debate? You get this massive rise because they start building in the numbers. So you have the non cyclicality, which means it's a diversification on the other things. I'm sitting here, uh, I say, okay, my biggest position is X. You know, my biggest position was Marvell. Well then it just fell 20%. My biggest position is now Eli Lilly because it went up 10%. Regardless, Eli Lilly has been unbelievable. And all of this is happening as it's about to post its 10th positive year in a row and this one will be another 30%. So it's been compounding in this very steady fashion on the back of the diabetes situation. But they've got a lot more call options with inside their numbers.

Speaker D: Is it fair to say that your thesis on Eli Lilly is one foot in the old world, one foot in the new world? What I mean by that is, uh, you're basically saying Eli Lilly is one of the best ways to profit off of the US government's lack of spending discipline because they are going to spend money. And a significant portion, 20, 30%, whatever it is, goes to healthcare, of which Eli Lilly is a very big, uh, component. Money ends up in their pocket from that. At the same time, all of the AI stuff, the new world, Eli Lilly is leaning very hard into that. And they're able to drop prices, accelerate growth, use M and A. Right, all those things. So Eli Lilly may be one of the most interesting businesses, I think I hear you're saying, where they're benefiting from these long term traditional trends of healthcare and aging population and obesity, but they're also almost disrupting themselves to a degree with all the AI stuff. And you put those together and it's like one plus one equals five. And that's why you're bullish.

Speaker C: This has to do with if they didn't have Manjoro and the whole Ozempic cash cow business. Like you like to see a business that like when, if you go through Apple, people have to remember like before the iPhone, yeah, they were turning the business. I mean Steve Jobs had turned it around. But how much did the iPhone change? Everything. And look at their hardware numbers. To go from what it was to what it is today. When you get a cash cow, you can get into other things like services and They've turned themselves into a service business for Eli Lilly. This cash cow side is enormous. All pharmaceuticals do not have this cash cow. And this cash cow is growing every single year right now. What are they doing with the cash? I made the joke, but Novo Nordisk had the same thing, and they used the cash to go pay dividends. And this is. I mean, this was a. They didn't want to make a bet. Eli Lilly has made significant AI bets. If I try to describe to people the importance of Toon Lab, the importance of the data center that they did for themselves, the setting up a location outside Stanford out in Silicon Valley, to basically work with Nvidia. When you see Nvidia and the CEO Dave Ricks on stage together and you listen, I mean, I spent a lot of time to just hear the plan, make sure that this was smart. But if you have all that cash. I have believed for the last three years that unfinished IP was incredibly valuable. And what I mean by that is when a biotech company goes public, which was a massive part of, I mean, the COVID years, and even before that, when they would go public, you have to have science behind that to raise the money that was necessary. So it's not like these were harebrained schemes or scams that would eventually go, these were ip. Now, maybe they weren't able to finish them, but if all of a sudden they're getting closer and closer and Eli Lilly goes, okay, we'll buy you guys. And they're doing these m. And as to buy these IPs that they think are worthwhile. Now, when you add in the benefits that came from Ozempic, they don't know why dementia's better. They don't know why the chronic inflammation, why all of a sudden people have less knee pains, why addiction went down. There's a lot of science in this, that Eli Lilly has data from all of these of people and what they've gone through coming out that, uh, should help them from the data collection. So when you go through everything and you really think what this is, I think this is a very unique part of AI. So when I say this will be the biggest AI company compared to Nvidia, there is a risk of an overbuild. You have to build that in. This is a cyclical thing. And I do think at some point we're seeing that with intel today. Why is intel down so much? It's not because the demand's not there. Their PC sales are suffering. Why is that? Because memory costs have gone higher, and you can't even get the memory. The bottleneck issue keeps these companies from actually being able to accelerate as much as they would. And so that's why you see these multiples compressing for Eli Lilly. I don't. They don't have this issue. They don't have to worry about this. This is a very different thing. So this gets into the application is the major story here

Speaker D: because of the AI and cybersecurity concerns. Do you have any cybersecurity stocks that you are buying or interested in?

Speaker C: So I do not spend a ton of time on single companies with inside the space. Um, if I wanted to say, the only software company that I own is Palantir and Palantir is becoming a much bigger position for me relative to the semi names because Palantir's outperform so much. Uh, I've talked about Palantir on here, but this got into the sovereignty AI thing. And if you go back from the day that Alex Karp spoke about the importance of sovereignty, AI sovereignty and you go look at what Palantir has done since that day, you made a lot of money if you went out and bought Palantir. So uh, that is kind of my theme on this. These names trade at such high multiples and that means I really have to drill down and I have to get a sense. I think all the demand side is going to be there. But if you ask me, do I believe that a lot of that demand is already built into the stock. There is no doubt that those names could go sideways for a year and a half. Just like we've seen in the semiconductor names for the last four months while their earnings have grown, it uh, can just be stuck in the mud.

Speaker D: All right, before I let you go, I want you to think of is there anything that you did with AI this week that is a little tip for everybody. While you're thinking, I'm going to tell them one that uh, I figured out. I used Grokbot and I set up a bot genealogist and I basically set bent maybe 15 minutes telling it, hey, here's my parents names, my grandparents names, here's family lore. I think that there's somebody named this that did this. Go find as far back in my family lineage as possible. And I knew some detail. Like I knew the town that my great grandfather comes from in Italy. I know this or that. But actually you'd be surprised. Some stuff I don't know.

Speaker C: Mhm.

Speaker D: Right. This thing was incredible. Marriage certificates, birth certificates, voter rolls, all, all the like public stuff that you you almost expected to be able to do it. Started to identify where certain records were. So, uh, my family, um, one part of my family comes from a place called Sumona, Italy, which is, I don't know if you've ever seen like confetti, candy, you know, like, uh, all right, that's where it was invented. That's the only thing that the town is known for. But the records only go to like 1865 or something on the Internet. Past that it is all written in books and stuff. It was crafting emails in Italian to email to the people in this town saying, can you go into the books and get this information? I said, dude, this thing is incredible. I would pay any amount of money for this tool. And then when you focus it on genealogy, I was like, you could do this for anything. So my one thing is, if you're interested in your family's lineage, your genealogy, uh, don't worry about all these websites. Just hook up a crockbot. Tell it you're a genealogist, go and just tell as much information as you can. And uh, it's a nice little, uh, weekend activity. Your turn.

Speaker C: Uh, only thing I'll add, um, that was new this week and this actually was from a direct thing that Matt said. Uh, producer, um, the boss. Yeah. So I started to, um. I have a lot of people that want shorter versions of my video. They wanted me to do YouTube shorts. They wanted me to do other types of videos my family did as well. So I literally took my video from the weekend and asked it to create shorts. I also uploaded, um, a bunch of old videos that I had done of my son skiing and had it create a new video with all the little clips as one thing. The video editing,

Speaker D: incredible.

Speaker C: It's incredible because I didn't have to do anything. I literally just uploaded the first video and said, can you find the most interesting clips? I want to do these as YouTube shorts for the YouTube channel. That's the way it started. And that was from the suggestion of Matt. And it did it in a matter of minutes. Like it was maybe six or seven minutes. I couldn't believe how good the selections were. But with my other videos and doing it from like family related things, this is where it became more interesting to me because the creativity that it has with, hey, here are six videos. Why don't you put these together in a way that makes it more interesting? If you want to put some music into it, go like anything along those lines. You'd be shocked at the ability to do it.

Speaker D: What did you Use to do it. Which platform?

Speaker C: No, this is Grokbot.

Speaker D: Grok. Oh, yeah,

Speaker C: that's what I mean is that historically to do video editing, there were AI tools, but it was kind of still a little bit of a hassle with Grokbot. It was shocking how fast it was.

Speaker D: All right, I actually lied. I have one other one that the team will get mad. It's not as AI specific, but I do think this is very important. Um, this week with Sylvia, we launched something called Sylvia Legacy. And, uh, if you watch this podcast, uh, I've had this conversation with a ton of friends that are married in the last three or four months. As we've been thinking through this, sit down with your loved one, spouse, friend, child, whatever, and say, if something unfortunate happened to me, do you know where our assets are and could you actually get access to them? Some people, yes, some couples or, you know, families. There is an awareness across multiple people. Most that is not true. Usually somebody is responsible for the spending, somebody is responsible for the investment assets. What we built is when you hook up all of your accounts into Sylvia. So you go to Sylvia.com, you touch your bank account, brokerage, crypto account, et cetera. You can now pick an individual, up to three of them and say, if I do not log back into Sylvia for some period of time, I want you to notify me. And so what I did is I chose my wife as my, uh, Sylvia Legacy person. I said, After 60 days, if I don't log in, I want you to send me an email and a text message, send one the first week. If I don't respond, send me another one the next week, send me another one the third week. If I do not respond or engage in any of those for three weeks straight, I want you to wait, I think it's seven or 14 days. And then I want you to take all of the information in Sylvia. So all my accounts, my assets, where they are, et cetera, and I want you to deliver what we call financial package to her. So I'm in control of who's the recipient, what information she gets, et cetera. But then I had to make a decision. Do I include. So Sylvia allows you to choose just the assets or do I include the chat history? Because we thought the Fine. Control. Some people think the chat history is very personal.

Speaker C: Mhm.

Speaker D: For me, I chose, I said include the chat history. Now part of it is I think she would be entertained by reading me talking to an ll. But two was that's really where the why is. What was I Thinking when I bought this, what was I thinking about? You know, tax, whatever. And so one, I genuinely believe that multiple people in a family, loved ones, et cetera, knowing that they will get access at some point if somebody passes away or whatever is important. But two is it started me thinking about the chat history has become this weird asset. It's kind of like families have scrapbooks, you know, all these different, like family based things. I talked just about the genealogy bot. Right? You're talking about the video editing, like what happens to all of your videos and all of your knowledge. How do you get that to loved ones?

Speaker C: Mhm.

Speaker D: Chat history. Not just of, uh, something like Sylvia, where it's very attributable to the assets, but then what about me talking to Grokbot about the business? Should somebody get access to that stuff so they could hopefully transition the business or whatever? It's just a fascinating time that we're living through now, right?

Speaker C: It is. And this is the point about when you get back to how few people are using the technology, um, I don't know what to say to people, just about how powerful it is. You're going to get over the privacy issues at some point. Um, the amount of times that if people want to commit to, I don't know why. And this is the number one reason you mention all these things. I still believe, not believe Muse is the most powerful for a lot of the things you're describing. And the reason is because Meta has spent an enormous amount on their model related to memory, ChatGPT and Grokbot. None of the. Well, Grokbot is similar. The memory side of Muse is unbelievable. So when I do my recipes, when I do anything, if I'm measuring my health for a month and I go, you know what, I just want to make sure that at the end the numbers that I'm seeing in oura ring and my iWatch match up. So I'm going to start telling you every meal what I've had. So if someone's trying to lose weight and they're like, okay, you gotta count your calories, it's much easier to say, hey, Muse, this is what I just had for breakfast. And that's it. Hey, this is what I just had for lunch. Anytime you eat something, you put it in there and then you don't have to tell it, okay, sum this up for the day. It just has that record forever. And then you say, all right, can you go back and give me all of the days of the month and give me the calories for each month so I can see if I'm not losing weight because of my exercise or because of my eating. And as long as you're honest with it and you're doing it as you go, literally like a walkie talkie, which takes two seconds, it's great. If you are someone who scrapbooks or you do something where you're keeping a daily journal, you can take a photo of it, upload it to Muse, and then it has everything forever and it never forgets it. And I just think that that's going to become a part of our lives. Uh, and it will be Alexa at some point as well, where you can just do it verbally and it's either on your phone or it's phone verbal. It just doesn't matter.

Speaker D: We should do an episode maybe towards the end of the year and bring all of the unique use cases that we have both discovered around using this technology and explain to people how to do it. I think people would be very interested in that.

Speaker C: We'll do it.

Speaker D: All right, that's it for today. Go to YouTube source Jordy Visser. He's going to put out a video tomorrow. Make sure that you subscribe. Happy Halloween to all of you. I hope that you do not eat too much candy. If your kids go trick or treating, make sure you them dad tax them. Make sure you take a little bit. Go check out Sylvia. Com sign up. Make sure you pick someone for Sylvia Legacy so that they will get access and understanding of your financials, uh, when you ultimately pass away. Because time does not escape us all. Marcus Aurelius all the way to us. We all understand that. See you guys next week.