Laventhal, josh brown. Jamoof has views on a whole number of Popular Companies and ones you might not have heard of yet but soon will. Its good to have you here did this go as you expected . It went way better than i thought it could go, quite honestly our whole goal was to fix a liquidity problem we see in Silicon Valley, which is employees are churning out of companies at faster and faster rates because they dont see a path on being compensated on what they believe is a fair mechanism. Its a bunch of issues with the traditional ipo process creating this log jam when we see that, as entrepreneurs tend to do, they try to unpack and fix it being able to reverse merge a lot of these companies fixes a lot of whats wrong in the ipo process. So it was oversubscribed by a lot, right from what we were told from Credit Suisse, it was the most oversubscribed spac in history. And there have been 20 to go public this year and thats the highest number since 07 why are these back in vogue and so popular i cant speak to why others are using them but let me describe how were going to use it when you think about a traditional ipo process, whats really happening is four or five banks come together and allocating an issue across hundreds and hundreds of their clients. The way these issues are priced tends to be quite random what that results in is a lot of unnecessary volatility and the most important thing that it results in is a lack of true awareness of the actual business when you think about Technology Businesses, they are so dynamic, they cant easily be expressed in simple gaap financials. What it really takes is a new way. So what were going to use the spac for is to curate 25 wellknown thoughtful investors who we believe represent the best of the best and now together what we are going to try to do is to get to a better understanding of ground truth of companies and help those companies exist in a more stable context in a Public Market separately now that the founder gets is a currency they can use to pay these great people so they stay at their businesses and dont leave. Youre essentially telling investors in some respects dont put your faith in a company that you might not know enough about, put it in us, put it in me im going to do and my folks are going to do the appropriate work people are betting on you to make the right Investment Decisions, right i think what theyre betting on really is for us to actually do a better job than, say, the traditional ipo banking infrastructure i think well do a much better job. Lets talk about a more explicit example in snapchat. You have a bank, Morgan Stanley in that case, spending weeks and weeks with the company they try to get the ground truth of what they think the company is worth its priced at 17, it opens in the mid20s, goes as high as 30 a share. All the algorithmic shops have to go out. Clear ly it was mispriced. The First Quarter happens. Snap is within 2 of their Revenue TargetMorgan Stanley says, oh, we made a mistake and now the stock is below the ipo price. Off that is fundamentally unnecessary and entirely avoidable. And really the only people that pay the price are the employees and the ceo. Youre talking about an exceptionally creative team, a lot of really good people who should otherwise have been left to build a business without the distraction of what was a process that they didnt control. Are you suggesting that a company like snapshould never have gone public at all . No. Im saying theres a fundamental ebert way to do it theres a better way to price these ipos and understand fair value. When youre trying to express a dynamic business like that simply in excel, again, i think what Morgan Stanleys analysts said, when the quote was we made a mistake shows you the capability in trying to understand a very dynamic, fluid business using tools that were, frankly, quite useful 20 years ago but are a little limited and what i would tell you is the future of how you get to an analysis, a groundup understanding of businesses today is through Machine Learning, data science, Artificial Intelligence. Those are the tool kits are modern financial analysis. We use those extremely successfully at facebook to build a great business i use that every day in how my team and i make investments, compounding extremely well, and i think that is how you need to help these companies and these investors find a shared Common Ground truth. Are you going to have multiple companies that reverse merge into im not going to call it a shell, into your special Purpose Acquisition Corp or are you looking for one target to be the back door. The latter. Were going to use ipo a for a company. Assuming that works, i think it stands to reason that we will look very aggressively at what we call technically ipo b, and then c and d. You change the name of the company . Exactly once we find the right target and that company is public, our first order of business would be to take the ticker to whatever they wanted it to be. All right so im an old school veteran of retail brokerage before i was an advisor. And in 05, 06, 07, we were doing a spac a week, everything from Chinese Technology companies, we did on wozniak, who was one of the founders of apple. If probably not for the management of each ones lack of trying, i think early investors were really excited and then the company that was announced was going to be brought public that way failed to maybe it was free scale semi conductors, there were some Tech Companies that did it. And the excitement wore off and the stocks ended up not working. This is an excellent question and an excellent point all of those were about control transactions where you would use that spac to acquire a majority part of an asset thats not what we are doing here we are trying to take and synthetically replicate a better path to an ipo in an ipo youre selling between 5 and 20 of your company if you think about our vehicle, ipo a, it currently has 600 million. If Credit Suisse exercises the green shoe, it will have almost 700 million in it so think about this as a merger of an entity that should be valued anywhere between 3 and call it 20 billion where that management stays in control, that team you stay as a shareholder. Exactly maybe a director. And heres whats so different. These 25 wellhealed investors that we partnered with today to start ipo a also agree that the current process is so fundamentally broken, they want to get a chance to sit side by side with these founders, understand their business in detail and support them for years. You talk a lot about nontraditional metric funds, though the funds in yo this is another great point lets think about a company like facebook, which i know a little bit about. Facebook, it went public at i think 45 a share. 40, 41 something. And then there was this narrative about its inability to capture the shift to mobile and the stock traded down to 18 and now its 170 odd stock. I think whats important to note in the context of facebook, the narrative that was written, which was very much outside in, it was from wall street analysts and other folks, were about a very brittle understanding of that company underneath, that company was still operating against the core metrics that we had helped figure out five or six years earlier. The point is the follow, which is that you need to have a more holistic way of describing Dynamic Technology businesses. Let me give you a different example. If you think about ride sharing, uber, lyft, those are all companies youll be dealing with in the Public Markets in the near future, right in the first 18 months of a business like that, all you care about is transit time. That is the single metric that defines Product Market fit but as soon as that happens, you shift to understanding ltv to cap. What is the new lifetime value of my riders and the profitability of my business then that stops to matter. Then the only thing that matters is driver lifetime so my point is all of those things are the leading indicators that then ultimately get reflected 18 months later in gaap it would be, i think, much more constructive for Public Market investors as well as these private Market Investors as well as frankly these ceos to be able to have a more honest discussion of what those leading indicators are in a way so that you have a better way of understanding at large. May not fit into a discounted cash flow analysis at first blush, but the things that are important ultimately will translate into that if its a good business. Ultimately. Thats the key, ultimately. Ultimately is going to be the hard part for you. That could be 18, 24, 36 months separately whats even harder is what if you have a hiccup in gaap should you overreact should you underreact . Are you also i understand what youre saying and maybe this is dumbing it down, but arent you arbitraging the life cycle of a company as angel investing, private equity and, book, go public. It used to be go public, 500 million was a target mark at cap. That obviously grew to several billion. You brought up uber which isnt public yesterday and when it goes its going to be in the tens of billions are you basically saying, wait a second, deviguys, i can capturet increase in value from the mezzanine to the public ipo by getting those companies at the lower valuations, maybe at the mezzanine level . To be totally honest, im not that financially sophisticated to know but im reasonably technically sophisticated enough to say the following, which is historically you are right Companies Used to mature until about year five or six privately and then would go public a great example is cisco cisco had a low single hundred Million Dollar market cap. They went out early, they had a Supportive Investor base but they grew as a Public Company masterfully. 200 acquisitions as one point was the largest market cap in the world. I think we have to go back to those days if you wait, 10, 11 years for liquidity then you get a snap maybe not in time frame but in terms of what the valuation is. What you have is massive employee attrition. Isnt this another way of saying if youre an investor, it gives the investor an opportunity to capture much more of the upside of a companys growth earlier than once they go public, where theyre already somewhat mature. Well, when uber goes public, how much real growth is truly left in uber, whereas some of these other emerging technology companies, to give investors a slice of that pie from such an earlier basis. A broader base of investors. Arent you giving them a greater opportunity at the same time to capture more of the growth from a younger phase of the business i think thats also true. So the way that we invest is whenever we deploy capital inside of a company, what we actually do is also deploy resources. We deploy people, and we are willing to partner with the engineering teams of the companies with which we invest and deploy our folks to help with data science, Machine Learning, a. I. The reason why that tends to be valuable is these are folks that have cut their teeth at places like facebook, google or amazon. They tend to be sort of these tier 1 10x to 100x folks so if they need some of that help, if they need some of that bootstrapping, we can also do that in partnership with them so their best days are still very much ahead of them. And youre hoping that the companies can hold on to the talent longer, before the talent splits off and says, you know what, with snapchat, twitter, both of these, people are theyre hemorrhaging in the case of twitter for sure. In the case of snapchat i believe to believe the same is true. When you have attrition rates as high as 20 to 25 , i say this comment all the time. Many of us may not know how to build a facebook, but we all know how not to, which is to have to replace your entire Employee Base every four or five years. Is it possible that snapchat and blue apron were not victims of a broken underwriting process, theyre just not good businesses i really dont i actually dont agree with that. I think snapchat is actually a really great business. I think its an even Better Business at the right price. I think its an even better Better Business at the right price with the right shareholders who want to own it for the right reasons. The founderers who do a deal with you guys, one dynamic for them is theyll have to deal with short sellers who may not believe to the extent that the shareholders and the spac believe. Thats definitely going to be something where it will be new they dont deal with that as private companies. Could you speak a little bit about that challenge and how you think about that well, this is where i think uncovering these nuanced understandings of a business, this next tier the metrics that sit beyond gaap is so important because thats where you can crush the shorts the shorts will be trading on a very brittle understanding of gaap and very brittle understanding of a business model. An excellent example of this is all of the pain and carnage that the shorts have endured in tesla. Elon is a great friend of mine and we are huge pro opponeponen. We made a huge call on tesla and on the converts. But we did it because we could see that the shorts had a very fundamentally brittle understanding of the business. They have had their faces rimmed o ripped off so these Technology Businesses are very tough animals to short. They can catch you in any one quarter in any one way in a way where it can violently rip up. But i think dealing with the shorts can be extremely fun, especially when you have a handle on what these north star metrics are, because you can make them feel a lot of pain. You have to be right and then youre less worried. One of the other interesting aspects of this spac is that, tell me if im wrong, if investors give you money and then they dont like what youve invested in, they can take they get their money back. They can absolutely sell and redeem and its even beyond that. To be very honest, the thing that we sold investors is if we dont find a company, then we wont do it. And part of that reason is this is a mechanism that we believe is necessary in many ways, and this may sound naive or you may not believe it, but is our way of paying it forward tony bates, the vice chairman of ipo a, adam bain, one of the original people at twitter, ian osborn, and myself, weve all been exceptionally lucky in the valley weve all been on the right side of history for the most part so far. What we see right now are things that are fixable and should be fixable to see these great businesses exist, because we will all benefit from many of these companies. And a lot of the narrative right now is people chide these unicorns because of valuation. Theres some envy back east theres no one making money from any of whats going on. So i just think its important for us to go and do the right thing and help these folks build these businesses and pay off their expectations frankly at the end of that process, at the end of two years we dont find something, its okay. Let me ask you one more question before we take a quick break. On the notion of valuation, is it going to be more difficult to find companies at a great valuation just given where valuations are you mentioned some of these unicorns with amazing valuations, where technology and the nasdaq have been trading, sort of pushing everything up. I think valuation is a function of two things number one is the capability to get to these ground truth insights and the second is time frame and so, you know, one would have thought facebook could have been expensive to some people at 40 billion. Now it looks like a steal. People probably got either one or both of those two things wrong. Similarly, there are many kinds of businesses today that may have seen bouncing up an down valuations i think the more important process to go through is how do you get to ground truth, how do you get to a shared understanding between these three organizations, right the company, ipo a, and our 25, what i think are exceptional investors. And i think the three of us, if we get to a shared perspective of value an a shared perspective of what future growth looks like, i think these are companies you will want to own all right were going to take a quick break. We have much more with chamath coming up. Also an analyst is making a big call on hertz and avis chamath has more to say on the Auto Industry. Were back in two minutes. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. You know win control . Be this guy. Check it out selfappendectomy oh, thats really attached. Thats why i rent from national. Where i get the control to choose any car in the aisle i want, not some car they choose for me. Which makes me one smooth operator. Ah still a little tender. vo go national. Go like a pro. Welcome back to the Halftime Report today from the new york stock exchange. Lets talk about hertz getting downgraded to underweight at Morgan Stanley the firm reiterating its underweight rating on budget group. Were joined now by the widely followed auto analyst, adam jonas, of Morgan Stanley good to see you again. Thanks for having us. I know you dont do a lot of this, i appreciate you being here wow, to underweight. Why are you telling people to sell hertz so our thesis on the technological analysis facing the car rental industry have been out there for a while its not just the uberization. We think the barriers to entry to car rental are going down we even think in the next couple of months, ford and gm, theyre entering into the rental car market they dont call it that, they call it the mobility market, right . But basically every car company in the world, which is supplying cars traditionally to car rental, theyre actually getting back into that business ironically but theyre not calling it car rental, theyre calling it the miles business, miles traveled theyre giving it a run themselves we think that that is unchanged. Were just using a tripling of the share price of hertz on the back of a temporary stabilization in used, and the storm, lets say, movement to the insurance Replacement Market which is going to help pricing were using as an example to reiterate our long standing story of theres greater risk than opportunity in car rental. Did you raise your price target, though, on both of the stocks that we mentioned yeah, we did. How does that fit in there . Because the damage we call it mother natures cash for clunkers program, okay its a wealth transfer from Insurance Companies to car dealers and people that had their cars damaged unfortunately or destroyed and that is going to create tightness in the used market listen, if youre thinking about the car rental industry in the United States at least, its enterprises world hertz and avis kind of rent it, pardon the pun for a while enterprise has 85 of the insurance Replacement Market, scott. Theyre contractually obligated to supply cars, good quality cars to state farm, allstate, geico, when they press that button for the claim and that creates tightness and we think prices will be pretty good for a couple of quarters we think it provides an opportunity to get out adam, its jim laventhal. I think what im hearing you say is that this industry is fatally flawed you want to be careful about using an anecdote to invest on, but any one of us comes out of an airplane, were going to uber, were not going to take a bus to a rental car and get charged with fees. I can go on and on i think what you just said about raising hertzs price target, is youre talking about a residual value to the Company Point of view did i hear you correctly or am i extrapolating my anecdotal analysis to what your thesis is. We think a year from now its going to turn into tougher comps and its not changing the thesis listen, its fairly it might seem fashionable to beat up on Car Rental Companies right now were so used to so much tech doing things for us. When you arrive at an airport and someone is trying to upsell you on insurance, its a nostalgic experience at best to most people its not a good experience but there is a bull case to be fair, and i think your guest talked about those north stars and redefining what could work you and i might look at car rental firms and say you own all these rapidly depreciating vehicles which are probably going to be obsolete in the next few years, but someone in the ride sharing business might look at hertz and avis and say, hey, youre capturing 40 or 50 million miles per day of Consumer Experience in those cars i want access to that data to train my Machine Learning algorithm so i can unlock hundreds of billions of hours of time spent in the automotive ecosystem. There is a bull case for car rental firms to be a part of that the physical maintenance, to vacuum up the vomit from the back seat of the awe tautonomou uber adam, this is chamath how do you expect hertz to be able to finance and pay for all of the cars that they may need to buy in advance of really understanding demand i think what jim said is so right. Demand for these businesses could literally fall off a cliff, yet all of their obligations and all of the debt they have to take on to basically prebuy just seems like this thing that just hangs over the business. So we describe car rental firms as part used car dealer, part travel agent and part bank. The answer to your question, which is a great one, is how much more open are the fixed income markets, and particularly the assetbacked securization market, its currently very wide open for business. Im not going to say frothy, its not my place to say that, but its very accommodating and thats enabling them to kick the can or take your question, which is a good one and will have to be answered at some point, but to not deal with it in the second half of this year but your question is going to have to be dealt with over the next 12 to 24 months and we think the cost of capital is unfortunately going to inflate so either through partnerships or some ex10 waited credit cycle, theyre going to need a little help perhaps. Adam, let me ask you about tesla. Did you see the picture of the semi we have, yes. What do you think so listen, tesla is one of those companies where theyre applying a. I. Into transportation you know, theyre not just a car company, theyre in the miles and the experience business. And when you do that in such a large market, your total Addressable Market could be in the trillions. We come up with a 10 trillion market for just the mobility and maybe 3 to 5 trillion for the value of time, which is what the Silicon Valley folks wantout o this ecosystem so trucks are a natural extension of the Light Vehicle market for them in terms of their propulsion system and the algorithmic driving. They have done incredible work on how we see the Trucking Companies embracing some of teslas technologies, not just in electric, but a. I. Driving. Might take a while but some really disruptive stuff. With the tesla, we give them about 10 in the u. S. Market it adds about 5 to the stock price. Its something, but for a company that big it doesnt move the needle as much as you think. Speaking of the stock price, are you comfortable still with your equal weight rating and i ask you that because as chamath said earlier, alluding to the shorts have gotten their faces ripped off in this name and even analysts who have tried to take it down anywhere, as you did from overweight to equal, the stock is up 12 since. Sure. It is tough to bet against this company in fact i would say you should not bet against this company. The message behind our equal weight, scott, is basically respect the company. We really respect what theyre doing. I say that every supplier and oem that we talk with in the traditional auto 1. 0, they have enormous respect and admiration for this company and what theyre doing. Yes, are both cases over 500 . They have a lot going for them but we do think that its going to invite competition over time and that currently theyre the only game in time in terms of auto 2. 0 or one of the only games in town. We think a year or two from now theres going to be some crowding in there. So we think the model 3 will be a highly successful product. But again to put fresh money in, in a portfolio when you have a range of other ways to play auto 2. 0. Tesla deserves to be in that portfolio but we need substantial more upside. So not a short but definitely worthy of inclusion in your portfolio. Are they going to need more i was going to say i think people are fundamentally misunderstanding the demand of the model 3. I think it is absolutely enormous and off the charts. In fact the biggest thing you can look at is purchases of the model 3 or the bmw 3 series that entire business is going to go to zero there is not a Single Person of right sound mind and body if you can build a tesla model 3 online and get it delivered in 30, 60, 90 days or you can get a bmw 3 series, would choose the bmw so i think its a transformational time for the company. I respect the direction of what was just said i think i would ask people and i hear that a lot from folks. Bmw is going to go to zero have you been to germany yes, you have im sure one in seven jobs, according to chancellor merkel, are related to the Auto Industry unlike some other companies such as facebook, where youre creating lets say a digital social life for the daughter of autoworkers in germany, this involves physically getting into foreign markets and destroying the local markets. Again, on paper i can see how you get there. This is going to get so political, and i think fragmented to where mobility becomes regulated utilities, not unlike water and electrical utilities. So there may be room in between, but i think theres going i think its different from the other markets you might look at. Adam, adam, in fairness, this is not about speculating about geopolitical shenanigans what im saying is if you look at preorder volume and order volumes of the bmw 3 series in the face of preorders of the model 3 in the United States, which is measurable data, not specious speculation, it basically has fallen through the floor. Ill give you that is a major the Board Members are watching this very closely i agree with you on that it is a problem. But i say theres extrapolating to and im not saying youre doing that, but folks that say the Auto Industry is wiped out in five years, there is a reality check to that that does involve real geopolitical and National Security issues that i think is relevant to the debate as well. Before i let you run, one of the arguments that jim would make, executive departures that fill up a page and a half, things that musk says that he cant deliver on and a continued cash burn and no doubt that theyre going to have to raise more capital, do you worry about any of those do you also think that theyre going to have to continually raise more and more and more capital . Im not going to speak on behalf of an individual investor there, institutional investor. The points that you mention are factally accurate, okay . The business consumes cash thats not likely to change any time soon. It seems like the more money they raise, the more they spend. At some point thats going to have to change, to be a longterm sustainable company. So that is correct if you limited your information only to that, you will probably make the wrong conclusion or at best be not making a fully informed Investment Decision as to what this company is actually trying to do i think if its just described if tesla is just an auto company, it is massively overvalued even elon musk has said that i believe on your program. If its more than that and theyre clearly spending the amounts of money and in genres to be much more than that, it may not be an expensive company. So i think theres i think its just an incomplete assessment the spread sheet would tell you its a short, but there is more going on there and i think the next six months were going to learn a lot. Adam, so good having you on today. Thanks for making so much time for us for those very interesting calls and of course kicking around tesla with us for a bit. Well talk to you soon, i hope. Take care. Adam jonas, Morgan Stanley. The other point, and maybe this has changed, you dont own teslas stock we are large buyers of the convert. The feature of the convert that we loved is it allows you to slip into the equity and capture 95 of the upside. Exactly as adam said, it gives you some Downside Protection in those long tail scenarios where theoretically some of these cash issues and cash consumption issues really rear its ugly head. All right go ahead, quick. I think he understands what people are excited about, but he would answer there was a time when enron was considered more than just a utility, its not just an Electric Company they were in trading and all these other things its yet to be seen if any of these other experiments become cash generating in and of themselves so i think its fair to say that the skeptics point out the financials, thats really what they should be point out. Although the difference was enron wasnt actually doing anything they were pretending to do it, whereas tesla is doing stuff. Up next, John Najarian sees unusual activity in a technology stock. Well see which way the Options Market thinks that name will move. First, Brian Sullivan joins us with whats coming up on power lunch in 25 minutes. Ye yeah. Equifaxs ceo will testify in front of congress. The representative leading that hearing will join us on what he plans to ask and whether management needs to go. Plus the ceo of one of the biggest auto dealers in america tells us about the impact of hurricanes harvey and irma have had on his business and the car business in general. And get this, the Cleveland Indians making history last night with the longest win streak ever in the American League the general manager of the indians will join us on power lunch with what they expect tonight. What happens if they win and if the house is finally sold out. The indians have come a long way from Willie Mays Hays and charlie sheen. The Halftime Report is back right after this ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Not rebalancing your portfolio. Pursuing your passion, not reacting to market downturns. Focused on what you love, not how your money will last through retirement. Let us help you with those decisions, and get on with your life. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. The strikingly designed lexus nx turbo and hybrid. Lease the 2017 nx turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. Welcome back to the half. Dr. J. , telestrator up here. Doc, what have you got for us . Make it quick today, judge. Weve got qualcomm up 24 cents on the day they step in and buy a ton, just a big block right away today as you can see stock around 51. 31 right here take a look at this block, about 14,000 of these calls goes across theyre the december 57. 50s with the stock under 52. Because its out that far in the future, im in these calls im probably be in them for one to two months and i love the trade. A stock that hasnt really done as much for us, but i think its about to. Okay, good stuff, doc, with the unusual on qualcomm. Chamath, might as well jump off and talk about some Technology Stocks which of the socalled fang stocks, exfacebook are you most excited about right now . If i had to pick one Desert Island stock, i think all roads sort of lead back to amazon. Ill just describe it to you in the following way, which is ultimately fang is all about learning the value of Machine Learning and Artificial Intelligence these are massive, massive data companies. Facebook is not really a social network, its a data company in disguise google is not really a search business, its a data company in disguise and amazon is this amazing business in that it is modeling consumption. It is trying to give every human on earth and every business on earth everything they need and so in that context, its basically in my opinion a proxy for Global Consumption its a proxy for gdp as a result, its probably the most unconstrained market that its operating in. Whereas ultimately facebook and google are selling ads so if i had to pick one Desert Island stock, its that. Is there any risk that you can see to the story is it regulatory in fact i would say the regulatory overhang is much higher in the case of facebook and google than it is for amazon and the reason is ultimately amazon is, again, a microscopic portion of Global Consumption today. Ultimately i think it has more room before it invites regulatory overview. On the other hand, facebook and google effectively are Surveillance States and they have so much personal private information about so many citizens of so many countries, it has to deal with some very sense ive iitive issues for example, the way states start to deal with this are coming out the eu is saying you cannot take your dollars those revenue dollars you generate in these specific countries, i believe it was germany and another one, were going to tax you now in germany. You cant just send that to ireland and pay basically no tax. So its already beginning because its part and parcel of them beginning to realize theres too much power unbounded. So i think amazon has a much longer run before it invites the level of scrutiny that slows it down. Does valuation matter and how as a investor do you get past Something Like that. Its a great question these companies have run so much and if youre trying to reunderwrite to any reasonable irr, any reasonable rate of returning, all roads lead to you cant be long this stock, you cant be long these stocks so it goes back to what i said earlier, which is you have to reframe the argument using a different set of metrics and then you have to reframe your time and the time window in which you decide these things and then you cannot look at it by looking at it, it will force you to react to it the short term will drive you crazy and youre likely to sell. And ive learned that the hard way in some cases. The traditionalists, you know, they might say were going to get the conversation away from earnings, were going to talk about tam, total Addressable Market, but even munger admitted that they should have seen amazon coming if anything through the lens of all the tires they kicked at other companies that ended up in amazons crosshairs. So i think theres a dawning realization that theres more to this game than what ben graham laid out 85 years ago. And i think that feelingmainstr i think it comes back to company dynamism you used to be able to sit in an office and send a postcard to a company that would arrive at the company in a few weeks to send you their annual report which would come a few weeks later which you could analyze using pencil and paper we moved in the era of microsoft excel to a world where analysts could make very rapid decisions. But now what youre really speaking to is the dynamism that exists because of technology and how technology is used to build these companies bottoms up and so when you look at these companies, you have to think about that in that context again, back to amazon to build on your point, the other thing that it has, which is a massive tailwind, is that it is competing against fundamentally Impaired Companies including walmart, quite honestly companies that dont have the technical savvy, that dont have the capabilities, specialist retailers, an entire overhang of cost structure that they just dont have to deal with. And so if it wasnt just the demand and it wasnt the fact that they werent going to do a better job, which they do, they also have to deal with all of these laggard competitors, which theyre just going to run over them. Let me ask you about another topic, bitcoin, which josh owns. Good call probably not as much as you. Good call. The naysayers are out in force. Howard marks, brilliant investor, called it a fad. Jamie dimon calls it a fraud gundlach, im going to let the mania go on without me and you are massively long. Yeah. Why well, first of all, i think its a very good sign when the traditional established infrastructure is short something or skeptical of something, because it should be what is the trail of bread crumbs that a smart intro spentive, intellectually curious investor says, oh, i should pay attention. When one goes in and reads and understands the technical logic around bitcoin and the fundamental product that its creating and the value that it offers, at the end of the day heres what you have to believe, which is that in a world of autocracy, currency curbs, quantitative easing, all forms of central bank created or implemented value destruction, you need a fundamentally distributed store of Value Bitcoin is the only one. And so to the extent that you want to put your hands in the hands of, you know, seven to 11 bankers to drive the logical functioning of capital markets, go ahead. When the ceo of a systemically important financial institution, which is like a designation we use for, i dont know, a jpmorgan, says Something Like there will be a government crackdown, is that a prediction or is that a warning or both its at most a hope and its probably just a random statement that probably doesnt mean much in the grand scheme of things to be completely honest. You dont think irs an treasury could rip 50 of the market cap just by coming out and saying, you know what, we want to know whos buying an selling, whos making money, where its going we want to get more involved you dont think that takes some of the allure out of having this thing out there completely unchecked . So heres the thing. Which it is right now. The answer to that question is only possible if you knew where to go to ask the question. And this is my point bitcoin does not exist as a company. It is not an entity that is controlled by a handful of people other than a distributed set of coders, half of which are known, but many of which are anonymous. So this is my point, it is uncontrollable it has already been a thing in which the genie has been let out of the bottle. You cannot get it back in. The irs has no place to go to. What could they do they could implement all different kind of ways in how you exchange it. They could shut down the exchanges tomorrow. It will happen like it did before sure. It will happen offshore on the dark web. Weve got to take a break actually were going to get a quick check on were going to get a quick check on crude oil i jumped the break Courtney Reagan and the futures joins us now. Were not ready to go to break yet because were watching crude oil break above 50 a barrel brian, what is driving todays move why are we seeing this i think were seeing a few things going on in oil over the last couple of weeks one being the iea reported yesterday demand has picked up couple that with some supply disruptions, whether its a hurricane or opec actually making cuts here now were getting a boost in oil. Couple that with a weaker dollar over the last couple months and now i think were seeing that midpoint of oil shift from that 45 range up to 50 here, but well see. I think we need significant demand to really pick up to see it go significantly higher, because the u. S. Oil producers are going to come online and theyre going to pump oil out above this level and go out and sell futures against that and hedge themselves and make some money there. Weve certainly been very range bound and 50 is a level we watch very closely. Jim, do you think its very significant, this 50 level . I do. I think if you look at the longterm trend, its been a down trend the movement of the last day or so has broken that trend now, i might need a day or two of confirmation. Tomorrow if it trades above 50, lets say thats in the october contracts, if it settles above there, if it trades above there, i think its a big shift and now ill be more of a bull with a target of about 54 on the upside if it does that right now im a bull ill be more of a bull if it settles up there. Thanks, guys. Today were Digging Deeper into this oil move with john kilduff, ken dickson will tell us why he sees further downside for the dollar thats a athllt e top of the hour the Halftime Report back after this this is where i trade andrs. Manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. 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Look forward to your 401k plan. Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Were back at post nine. Theres shares of equifax down another 3 today the shares have lost a third of their value in the past week after the company disclosed that major security breach. Im curious, your point of view, on not equifax specifically but just cyber in general and the way that you think about technology how worried should we be well, i think if you worry, if you start the question that way youll worry yourself into a puddle its almost better to assume all of your data has likely been breached already meaning you might as well assume people out there know your credit card information. Thanks a lot. The problem is it has leaked everywhere and one has to ask ones selffor all the times equifax has been hacked, how many times other than this one thats been publicized has it happened its probably happened before. Its not just one accidental spear fishing attack that ez people have probably been in there for years so the reality is, this information is out. And i think what it speaks to i was saying this earlier, which is so right. You have to move to things that are unique you have to move to biometric, retina scan and just get away from all of this mothers maiden name dogs name where did you first go to college. Its stuff is too hackable. Its over. Too simple. Too simple. The other, a complete nons. E. Non nons. E. Non nons. E. C. We tour, adds on facebook and the ability of adds with questionable content to handle that . If you think about the analogy of a sweat we are a loose piece of thread and if you pull on it the sweater comes undone, this is that issue the idea that theres only a fake news issue is not true. Theres a fake content issue if you can not disam big wait advertising versus content, and you have the most unbelievely targeting advertising system in the world, it can be a recipe for disaster lets say the five of us decided to be evil during the eclipse, we put together a few hundred thousand dollars and said lets get 10 Million People to stare at the sun the problem is you would have been able to target it to all kinds of people that you thought had a high receptivity to doing it and you would have gotten that to happen its a simple and silly example but it articulates the problem, which is that there are no ways of knowing what the truth is anymore and yet there are more and more sophisticated ways of getting very questionable information and content to everyone in the world. How do they deal with it . Can they deal with it . This is where i think you really have to think about how regulators intervene this to me is the single biggest risk for those two businesses. A regulator says especially in europe because i believe it happen there is first you need to dial back the capability of your advertising. I do not want you to allow 300 or 400 variables or tf targetino my citizens. Thats probably the most reasonable thing a government could say in europe, germany, france, et cetera. But thats pulling that thread longer and thats what starts to unravel, the true monetization capability of those businesses, thats the risk that has to be mitigated . We have about a minute left less than a minute youre a part owner of well as the Golden State Warriors, the nba champion Golden State Warriors you guys have a family feud. Kevin durant says no one wants to wear underarmour. Steph curry says i beg your pardon those are my words not his. You cant tell me no one wants to wear our shoes. Youre not touching that. This is one where im literally telling the truth but its so down the middle. I have both a pair of stephs and kds shoes i wear them both but one are high cut, one are low cuts fair enough, thank you for being here. Final trade, real quick. Nielsen, the rating agency, bought it oday. Gm continues to break out. Alb up another step. That does it for us again, thank you for being here thanks so much for watching as well, well see you tomorrow power lunch begins right now welcome to power lunch im Tyler Mathisen deal or keep dream a lot of confusion about President Trumps meeting with nancy pelosi and Chuck Schumer and what came out of it with respect to daca. Will it play into any bipartisan deal on taxes, too there are a lot of moving parts, we have live reports coming up and dropping the hammer, President Trump is blocking chinas move to buy lattice semiconductor. It comes at a sensitive time for u. S. china relations are other deals now in jeopardy . Plus, cbs