Animal Spirits Podcast
Animal Spirits is a show about markets, life, and investing. Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, listening to and watching. Look for new episodes every Wednesday morning. See our disclosures here - https://ritholtzwealth.com/podcast-youtube-disclosures/
Total Ideas
5
With Returns
5
Equal-Weighted Return
-1.67%
All Ideas (5)
5 Total
Target Underperforming Relative to Walmart and Costco
"Target is down 33% this year. So I pulled up Target, Walmart, and Costco over the last five years. Now, maybe this is just an inflation story, but Walmart and Costco have been phenomenal stocks for this decade. Target has gotten smoked."
The discussion compares the recent underperformance of Target with the strong performance of Walmart and Costco. The speakers suggest that Target\'s decline, marked by a 33% drop year-to-date, is likely due to management execution issues rather than solely inflationary pressures.
NVIDIA as Poster Child for an AI Bubble
"But with NVIDIA, let\'s just say the poster child of this era, it\'s trading at \u2013 I don\'t know. What is it trading at? 35 times forward earnings?"
The speakers use NVIDIA\'s high forward earnings multiple (around 35x) as an example of the potential risks of an AI-driven bubble. They question whether current valuations can be sustained in the face of excess tech spending and rapid capital deployment.
Bridgewater All-Weather ETF (ALW) as a Diversification & Resilient Portfolio Tool
"I think at the end of the day, like the reason I\"m so excited about all W in this channel is that it\"s just it\"s really a one stop shop line item that can help investors plug a lot of gaps in their portfolio."
The discussion highlights the Bridgewater All-Weather ETF (ticker ALW) and its role as a diversified, capital efficient solution for investors. The strategy is built to balance risk across different economic environments including shifts in growth and inflation. While it may underperform during strong equity rallies, it offers significant diversification benefits, serving as an alternative or complement to traditional 60/40 portfolios, especially for long-term investors aiming to manage downside risk.
Amazon's Expanding Ad Business Outpacing Competitors
"The company pulled in $56 billion in advertising revenue in 2024 and another $13.9 billion in Q&A this year. Compared to Comcast NBC Universal bringing in just north of $2.6 billion in ad sales last year, Amazon did $13.9 billion in the first quarter of this year. Amazon's year-over-year ad revenue growth is roughly in line with Facebook and double that of Google."
The commentary highlights Amazon's dominant position and rapid growth in the advertising business, suggesting that its ability to leverage consumer data and technological capabilities is enabling it to outpace traditional media companies. This signals potential long-term competitive advantages in the digital ad space.
Oracle Leverages Debt to Fuel AI Ambitions
"There is no way for Oracle to pay for this with cashflow. They must raise equity or debt to fund their ambitions. I believe Oracle has just sparked the elusive animal spirit to life. I believe Oracle is the quarter that we will remember in history. Oracle is going to go negative free cashflow to win, and it's likely that incumbents will respond."
Oracle is breaking its historical reliance on self-funded investments by tapping into debt markets in order to aggressively fund its AI initiatives. The commentary suggests that this move may trigger a broader shift, forcing technology incumbents to significantly increase their capital expenditure to remain competitive.