Animal Spirits

Disney's Stagnant Earnings and Underperformance

"So, here's the deal, Jack. The earnings per share hasn't gone anywhere in a decade. The stock has underperformed on every single time frame for the last 30 years. I had Sean look at the 1 3 5 10 15 20 25 and 30 and it's underperforming on every time frame 30-year time frame. The S&P is up 10% per year and Disney 7. That's a big number. I'm glad you said that because the actual numbers are astounding and yeah, the company is phenomenally profitable. Its earnings aren't growing, but it's still making a ton of money. But the market doesn't value that."

The commentary highlights that Disney (DIS) has seen stagnant earnings over the past decade, resulting in underperformance relative to the broader market. Despite the company's strong profitability, Disney's growth in earnings has been limited, which, combined with a potentially misdirected strategic push (e.g., Disney Plus), has led to its stock lagging behind historical market returns.

Macro Commentary: Small Caps' Potential as Margin Spreads Widen

"One more. Um I like small caps going into 2026. There I said it. Can't help it. Man, Matt has a chart case last week. Remember, Matt has a chart showing that the profit margins for the S&P 100 versus the S&P 600. The spread is basically at an all-time high with 15.7% for the S&P 100 and just 5.9 for the S&P 600, while the S&P 600 margins peaked 3-4 years ago."

The speaker expresses a bullish macro view on small cap stocks heading into 2026, highlighting an all-time high margin spread between large cap (S&P 100) and small cap (S&P 600) companies. The widening spread, along with historical data on profit margins, supports the notion that small caps may deliver attractive performance going forward.

Bought more Blackstone at depressed levels

+5.46%current return

"I bought more Blackstone a couple weeks ago like when it was getting pummeled."

The speaker expresses a bullish trade call by stating that he increased his position in Blackstone when its stock was depressed. This comment implies confidence in a recovery, suggesting that the low levels represented a buying opportunity despite broader market uncertainties.

Oracle Dip Trading Commentary

"Credit to me I tried to buy the dip in Oracle. I sold it on the day that it reported earnings. I lost 10%. But I said in our Slack channel I love it that Oracle is getting the [ __ ] bit out of it because the numbers weren't that bad."

The speaker reflects on a personal trade in Oracle (ORCL), noting that despite incurring a 10% loss after selling on earnings day, he appreciated the stock's dip because the underlying business numbers remained solid. This commentary provides investor color on Oracle's temporary weakness and suggests that the market reaction may offer attractive entry points.

Trade Call: Buying Oracle on a 30% Dip

-6.62%final return

"I bought the crash. Uh, hand up. I bought Oracle. I bought Oracle. I I I sold Disney finally and I bought Oracle. How much did they fall by? Uh, 30 something%."

The speaker expresses a clear trade call on Oracle (ORCL) by capitalizing on a roughly 30% decline. His rationale is that Oracle's fundamentals are too important to risk a prolonged crash, as exemplified by the comment on Larry Ellison's influence. This pullback is seen as an opportunity to buy into a stable tech giant amidst market volatility.

Nvidia Nearly Matching Financial Sector Size on Earnings Catalyst

"So these numbers are these numbers are kind of insane to me. So uh healthcare is $5.2 trillion. Okay. Nvidia is essentially the same size as the healthcare sector. Financials is 7.5 trillion now. So Nvidia, we're not — it's Nvidia is like a one good earnings day away from being as big as a financial sector. Holy smokes."

The speaker highlights Nvidia's massive scale by comparing it to the healthcare and financial sectors, suggesting that a strong earnings report could significantly boost its valuation, showcasing bullish sentiment on the company's potential.

MicroStrategy's Collapsed Bitcoin Premium Raises Concerns

"So, the company formerly known as Micro Strategy reported earnings this week. Chart Kid made this looking at the ratio of Strategy to Bitcoin. And this peaked a year ago actually in November 2024 and it has been straight down for the last really since July. It's been acting really funky in a bad way. The next chart shows the value of their Bitcoin holdings compared to the market cap and people are heming and hawing a year ago. Why are they getting such a premium? Well, guess what? That premium collapsed. Matt also showed the market cap value divided by the Bitcoin holdings value and it peaked at like 3.5 times. It's now 1.2 times."

The discussion highlights MicroStrategy's recent earnings report, emphasizing a significant collapse in the premium between its market cap and Bitcoin holdings. The ratio that peaked at 3.5 times has now shrunk to 1.2 times, indicating mounting concerns about the sustainability of its valuation and underlying fundamentals. This company-specific commentary gives investor color on potential risks associated with the current premium levels.

MicroStrategy Remains Flat Despite Bitcoin Rally

"I have an update on Micro Strategy that I asked Chart Kid to do a couple of weeks ago, but haven't got around to sharing on the show. We'll do it next week. Let's just say that Micro Strategy, the stock, is basically flat on the year. It's interesting. ... No, I'm talking about Micro Strategy. Oh, so Bitcoin's up 25% or something and Micro Strategy is up two. But if you look at MicroStrategy divided by BTC, it is at multi‐year lows."

The speaker highlights that despite Bitcoin posting a significant gain, MicroStrategy's stock performance remains essentially flat over the year. When measured relative to Bitcoin, the performance gap is at multi‐year lows, suggesting that the stock is underperforming compared to the broader crypto rally.

Rare Earth ETF Commentary Highlighting Global Supply Shift

"This episode is brought to you by VANC. Rare earth metals are the hidden backbone of modern technology and defense, powering everything from smartphones and electric vehicles to fighter jets and wind turbines. Van recognized this early, launching the rare earth and strategic metals ETF, ticker RMX, 15 years ago, well before supply chain security became a global priority. Today, China dominates the production and refining capacity of rare earths, creating real challenges for the global supply security. As these materials are essential for technological innovation, clean energy, and national security, that's why countries around the world are racing to build their own supply chains and reduce reliance on China. As this global shift continues, investment in the rare earth ecosystem is growing rapidly from mining to advanced manufacturing. Investors can access this powerful trend through REMX. Visit van.com/remx compound to learn more."

The transcript opens with an advertisement for VANC, highlighting their early launch of a rare earth and strategic metals ETF (ticker RMX). The speaker underscores the global shift driven by the geopolitical dominance of China in rare earth production and outlines the increasing importance of securing domestic supply chains to support technological innovation and defense. This commentary emphasizes a bullish outlook on the rare earth sector and positions the ETF as a means for investors to tap into this trend.

AMX Positioned for Strong Growth in a K-Shaped Economy

"AMX, uh, AMX is just in the absolute sweet spot of this K-shaped economy. They are a premium product for premium spenders and they are killing it. Their total build business shows 6% to 8% year-over-year growth. Goods and services, as well as travel and entertainment, are up 9% and 8% respectively this quarter. Look at the year-over-year growth among younger demographics: Gen Z is growing at 39%, while millennials are growing at 12% compared to baby boomers at only 4%. Moreover, millennials now represent 30% of total spending, surpassing baby boomers. How crazy is this?"

The speaker offers strong company commentary on AMX, noting robust year-over-year growth across various business segments. The metrics indicate that AMX is capturing an increasing share of spending among younger consumers, suggesting a bullish outlook for the company in a K-shaped economy.

Company Commentary: Delta Airlines' Dominance in the Industry

"Delta is now 60% of the industry's profits. Kind of wild. They're killing it. I mean, they're by far the best airline. It's not even close, right?"

The speaker highlights Delta Airlines' impressive performance, noting that it now captures 60% of the industry's profits and is regarded as the best airline. This commentary underscores Delta's dominant market position and conveys a strong, positive outlook on the company.

Company Commentary on Costco's Expanding PE Multiple

"I did some research over the weekend. Um, and the PE of Costco going back to the start of the 21st century was around 20. Then it just exploded higher, got as high as 60 earlier in the year. I think it's not solely because Costco is suddenly massively more profitable; rather, it's a combination of modest margin tailwinds, emphasis on modest growth in e-commerce and international scale, the strength and stability of the membership model, a premium multiple for perceived defensive qualities, and investor rerating dynamics."

The speaker provides detailed commentary on Costco's valuation, noting that its PE ratio has expanded from around 20 to as high as 60. The commentary stresses that this increase isn't driven by a marked improvement in profitability, but by various qualitative factors such as margin tailwinds, e-commerce growth, and a stable membership model. This adds investor color to the stock without making a direct trade call.

Target Underperformance Highlights Execution Issues

"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 performance of key retail stocks where Target, down 33% this year, is lagging while Walmart and Costco continue to perform strongly. The commentary suggests that Target's underperformance may be a result of execution issues rather than a mere inflation story.

Nvidia Valuation and the AI Bubble

"With like Nvidia, let's just say the poster child of this era. It's trading at I don't know what is it trading at 35 times forward earnings. If you look out to 2029 ... there's no world in which these numbers make sense."

The speakers discuss Nvidia's high forward earnings multiple, suggesting that the current AI boom may be inflating valuations to bubble territory. There is a cautionary tone regarding whether the sector can sustain such high valuations amidst a backdrop of strong fundamentals and excessive spending.