AI裂缝：该躲到哪里？

That's the most important thing to figure out. Avi, how did you make your money? Like, why is the AI trade going up?

The hyperscalers decided to build out massive data centers. They decided to invest $600 billion, $700 billion. You saw that value basically get baked into the price.

And now you're seeing cracks. The things that are holding up the market are where those hyperscalers are putting their money now—not necessarily the Google, Meta, and Amazon price action themselves. It's all about what these companies are spending their money on. That's what's driving the market forward.

If the market's going to crack, and the general approach is, “Okay, hyperscalers are cooked, memory is cooked,” what's going to happen next? It's what AI is actually going to affect in the real economy. And then you kind of have to hide there.

1. Does Technical Analysis Actually Work?

Avi, how are you doing, my brother?

I'm doing great. Today is an amazing, wonderful day, mostly because the Nasdaq is not down 3%, which it was yesterday. That was a crazy move—a pretty aggressive fall from the top. The Nasdaq is obviously looking a little bit shaky right now. We had that double-top formation.

Wait, what am I talking about, Jonah? Am I using technical analysis to try to trade a megatrend? Somebody slap me.

Technical analysis never works, Avi. It's a road to ruin. Unless it is working, in which case, ride the tiger. Because if it ain't broke, don't fix it.

You know, it's one of those things that I think does actually work in certain contexts. Where does it work? It works specifically when there's a lot of retail in an asset and there aren't many fundamentals backing up how the asset should be trading, right? So then the only thing that you can use to get in and out of the asset is technical analysis.

That's why Bitcoin traded basically technically perfectly for many years, until the quants sort of came in and took it over. Technical analysis was a great way to trade, and even in crypto in general, technical analysis is still better. Things tend to respect support for the first time. They tend to respect resistance for the first time.

Buying breakouts tends to be very good in crypto. That tends to be a very high hit-rate strategy. If something trades above all-time highs, you buy it, because crypto tends to be a momentum asset, not necessarily a mean-reversion asset. Although you obviously have to figure out what type of market environment you're in.

When there's high upside and downside volatility, what you want to look for is volatility to determine what regime you're in. Generally, in crypto, the higher-volatility regimes tend to be momentum, which is actually different a lot of the time from the equity markets. In equities, the higher-volatility regimes tend to be when people don't know what's happening, and there tends to be chop.

That's what you're seeing now with the Nasdaq. It's sort of gone sideways. Basically, the Nasdaq has gone sideways since May 15. We're kind of at those prices from May 14, and volatility has been extremely high. Volatility is low when the Nasdaq is going up.

With crypto, it tends to be that when volatility is very high, there are a lot of people interested in the asset. In crypto in general, the main thing with a lot of these assets is that volatility is the reason you're playing with them, right? So the higher the volatility, the better the actual asset itself when it comes to crypto.

Yeah. That was a total tangent for the beginning of the episode, but a good lesson for you, the listener.

Yeah, I don't know if I completely agree with that. I feel like—

I mean, you designed the strategies at Cumberland for a bit, right?

As an options trader by trade, I should practically have opinions on volatility. Basically, what I know about volatility is that it really depends on the asset class.

In equities, volatility goes up when prices go down. Volatility tends to go down when prices are trading sideways or grinding higher. Only in extreme euphoria events, like 1999 in the Nasdaq, did equity volatility increase as the price went up.

Realistically, in equity markets, it's a place where people store value. Volatility and panic are related, and panic happens to occur when prices go down because that's where people put their nest eggs.

In crypto, volatility, oddly, is like a barbell. It's most extreme when prices are going up during a euphoric bull run or down during a 2022-unwind-style event. On the downside, once again, it's panic. To the upside, it's extreme greed that causes the volatility.

Oil—the big fallacy that ruined a lot of market makers for many decades is the idea that volatility goes up when prices go down. But if you actually do the analysis properly, volatility is quite stable in oil if you model it in dollars per barrel instead of percentages.

It turns out that a barrel of oil tends to move about as many dollars and cents per day whether it's trading at $30 or $100, which is unusual. Most asset classes are a little more stable in percentage space. Oil is more stable in dollar space, so that impacts the way that you model volatility.

2. AI Cracks: Where Do You Hide?

Needless to say, where I'm going with all this is that if you're asking whether you're seeing volatility in markets, it depends on what the markets happen to be. In equity markets, it's usually associated with some sort of panic or extreme greed.

I think that's why, if you're seeing volatility to the upside, it's probably a time to lighten up your position, because you're not going to get heightened upside volatility on mild greed. You're going to get heightened upside volatility on extreme greed.

Assuming we back out, obviously there was a pullback at some of the big white-hot memory stocks—Nvidia, whatever. I saw some charts on Twitter alluding to the idea that hyperscaler free cash flow, after a steady, almost 2-decade uptrend, is going down to 0 because of what they're spending on AI buildout and hyperscaling.

There's a little bit of fear that these companies are no longer as sexy because they're spending like crazy. I view this as white-hot upside volatility. These stocks are exhibiting the behavior of the Nasdaq in 1999. There's a whole lot of room for these stocks to run, but anything that's ripping this hard is going to have some crazy pullbacks.

So if anything, these are dips that you should either buy if you have tremendous conviction, or you should just be looking at this and sitting on the sidelines if you're not heavily invested, because it's starting to get into the scary zone—the later innings. I don't know. What do you think?

Yeah, I definitely think we're in the later innings of the trade, but it's the late innings of the trade that often provide the most insane returns.

For a tremendous amount of time, obviously, the hyperscalers were the ones sending this market higher. And you kind of have to know: how did you make your money? That's the most important thing to figure out. Why is the AI trade going up?

Well, I think the answer is pretty clear. The trade went up so much because demand for AI shot through the roof. As a function of that demand, the hyperscalers decided to build out massive data centers. They decided to invest $600 billion, $700 billion.

Google had an $80 billion equity raise to continue its CapEx spend. All of these companies are spending absurd amounts of money on building out the future of AI and making sure that we can bring the cost down, service as many people as possible, and integrate AI into the economy.

What you're seeing right now is that value basically got baked into the price of these hyperscalers, right? You saw them shoot up in a straight line, and now you're seeing cracks. The things that are holding up the market are where those hyperscalers are putting their money now—not necessarily the Google, Meta, and Amazon price action themselves.

It's all about what these companies are spending their money on. That's what's driving the market forward. To me, that represents the second leg.

The third leg is when you have fiber-optic cables go crazy. AAOI, for example—those are the optoelectronics, right? Those obviously performed really well. You see energy performing really well. Basically, everything has gone downstream.

Now what I want to see is investment in areas that are actually genuinely going to benefit from AI. What is this megatrend actually going to change? What are the fundamental demand drivers that are going to be different because of AI?

A great example of this is shorting Accenture. Consulting firms are probably going to be less in demand. Another example is why I'm spending all this time on biotech, and why I just bought a ton more ARKG and a lot more of the XBI biotech ETF.

Another one is BLLN, which is Billion to One. It was shown to me by a good friend who has put a substantial amount of his money into it. He's in biotech. He's smart on this.

Cure, for example. I'm trying to figure out what's actually going to be impacted downstream from AI. If the market's going to crack and the general approach is, “Okay, hyperscalers are cooked, memory is cooked,” what's going to happen next? It's what AI is actually going to affect in the real economy.

And then you kind of have to hide there. Now, all of this being said, I'm not a doomer. I actually don't think the market's fully cooked yet. I think that we have time.

I think we still have time left. We'll see with earnings today with Micron, but I think that we still have time left. I think that we're going to go higher, but you have to shift your mentality: Where are we going to start going higher? I think it's in these places where AI is actually going to revolutionize these industries, as opposed to just demand for AI going higher. I'll stop there. I kind of want to hear your take, but that's what I'm thinking about right now, unfortunately.

And by the way, biotech has a great risk-reward right now.

Biotech is something that I stay away from, not because I'm lazy or because I'm the type of person who considers things outside of my wheelhouse to be untradeable. I love to trade new things. I love to explore. Biology just happens to be a weak spot of mine. It's the way that some people hate—

What's wrong with your biology, Jonah? Are you saying that your biology is weak?

[laughter] We all know that. Look, I don't know. Someone commented—if you're listening on audio, I'm pulling it up—“Jonah just looks like he finished a Vegas bender, or his kids didn't let him sleep for a couple days. Which one is it?” It would be the latter.

I no longer am allowed to do Vegas benders after a Vegas bender earlier this year. I got invited to something last-minute, and I went. It was fun, and then I came back and I got reamed. I don't think I'm going on any Vegas benders for at least a little while. Maybe if I achieve something in life, but for now—

I think it's pretty much on lockdown.

You would think so. But when you float in your pool and crack open a beer in the middle of the day while your wife is dealing with 3 screaming, tiny little kids, the whole “I did my dues, I paid my dues, now it's your turn” argument doesn't really work as well. So this time I look like crap because my kids didn't let me sleep for a couple of days.

Not going to lie, that kind of sounds like a scene from BoJack Horseman.

I love that. I actually know the executive producer. Shout-out to Andy Redman. He's a really cool guy.

Really?

Yeah, I met him in LA. He was an awesome, awesome dude.

3. The 13-Year-Old's Portfolio: Is The Top In?

Actually, I went to this event—it's a total tangent, but somewhat related. I went to an event called the Tablet Awards by Tablet Magazine. I don't know if you've heard of Tablet Magazine.

Tell me. Tell me.

I was just there for a reason.

Okay.

Thanks for that. I just showed up, and it was kind of interesting. There was a guy there who had written Wall Street 2.

Horrible movie. Money Never Sleeps.

Yeah, Money Never Sleeps. He had written that. His name's Alan Loeb. Great guy. We hit it off. Very nice guy. But there's a point to this story. I'm going somewhere.

I overheard him talking to this kid. I won't dox the name because this kid's, like, 13 years old. There's a 13-year-old there, and this kid has a portfolio. I had just walked into the event, and I hear him talking to this kid about what to buy and what to put in his portfolio.

So I immediately turn around, and I'm like, “I got to figure out what are the 13-year-olds interested in buying? What could possibly be in this man's account—or child's account, I guess, because he's 13?” He had his permit to drive.

What was in the account was Google, Uber—Uber for some reason—and then just Nasdaq and the rest of the hyperscalers. At that moment, it struck me that if 13-year-olds are buying single-name stocks in the hyperscalers, maybe the trade's over.

No offense to the kid, but I'm sure he's smart. I'm sure he's got really smart parents. But if that information has filtered down that you should be in these single-name stocks—he wasn't just in an index fund—you should be in Apple, you should be in Google, you should be in Meta, that's where you should be putting your money—

[snorts]

And then I turned and I said, “Well, maybe you should consider putting some memory stocks in your portfolio.” The guy looks at me and he's like, “Well, don't you think they've run up a little bit too much? Don't you think they've gone up far too fast?” And I go, “Well, did you take part in the rally?” He's like, “No.”

Look, this guy's a Hollywood guy. You don't expect him to be crushing it on memory stocks. He crushes it everywhere else. But what also struck me was that if the hyperscaler trade is saturated and most people actually still haven't taken advantage of the memory trade, maybe we have room to go.

You might see the Nasdaq come off. You might see Google come off. You might see Apple come off. You might see all these other assets come off because that trade has been saturated. The memory trade is still maybe not fully penetrated. Your taxi drivers are not buying memory stocks yet. Your 13-year-olds are not buying memory stocks yet.

I did tell him to buy Intel. I really hope that works out, because it was not financial advice. I never give financial advice to anybody. But that was a kind of interesting moment where I realized that, wow, yeah, we're still not fully there.

What I would expect to see at peak bubble is every 13-year-old buying SanDisk in their account, right? He hadn't bought any SanDisk, so that was at least somewhat reassuring to me.

The anatomy of a bubble is when your Uber driver starts talking to you about, “Should I buy XRP here?” It's usually near the top, right? Or, “Should I buy Cardano?” We from the crypto world definitely have a bit of a window into what a bubble looks like and when it's about to pop.

I don't think we're at peak euphoria yet, just based on price-to-forward-earnings ratios, especially for the component makers like the memory stocks, the Intels of the world, the SanDisks of the world. I don't have it in front of me here. I'm obviously—

Yeah, or a pool or a basketball. Where—there's something leaking in the background.

4. The Saylor Blowup Will Be The Trade Of A Lifetime

Oh, yeah. Sorry, there's a bunch of kids over there. I'm in a hotel. I don't have access to my room right now because my family's in it. That's why there's a no-smoking sign above me—

Don't smoke. Smoking's bad for you.

I'm not in the lobby, but I'm in a lower lobby. I apologize to anyone listening for the screaming of a bunch of 7-year-olds beating each other up over there.

You know, I will say I am endlessly shocked that Jonah has 3 kids and somehow we have managed not to have that yet with you, Jonah. Do you guys remember that event on CNN during COVID where the kid runs into a room while the guy's on CNN or something like that, and the mother has to come in, falls over herself, grabs the kid, drags the kid out, and he's just sitting there like this the whole time? I'm surprised we haven't had that yet with you, Jonah.

Thank you. Yes.

It says a lot about your conscientiousness, your ability to navigate podcasting and being a father. One day I hope to be as good a father as you.

Thank you. I appreciate that. The way to be a really good father slash podcaster, in that order and not the other way around, is to lock your office door and force your screaming kids to become desperate and cry themselves into submission in the hallway outside your office door. That's how you keep them out of your—

Oh, has that happened?

5. The Socialism Trade: Sell What They Redistribute

Yeah, at least once. It's a pro technique for fathering and negligence as a strategy. Exactly what you just said.

[laughter] It's like I wish that applied to trading as well. I wish negligence was a good trading strategy. If you ignore your stocks, they do better. Well, maybe that's actually true.

Sometimes it is. Honestly, sometimes we may have happened upon something here. Sometimes negligence is just the way. It's basically like, “Man, that is a really annoying noise. I'm going to have to come up with something and feed it back to you so that you can talk while whoever they are calm the [bleep] down.”

Anyway, what I was going to say is I think you can't ignore your white-hot bubble assets, but you can certainly ignore the S&P until the socialists take over the country.

Well, which, by the way, you're seeing a little bit of that happen with the New York election cycle. It was bad.

What the heck is that?

I mean, this is—

Madness for your—

Future, for your Democratic Party. This is the future of the Democratic Party.

It's just a bunch of people screaming, “Free Palestine,” saying, “Free Palestine, free Palestine. Vote for me because free Palestine.” And you're just like, “That's insane, because you're about to be a congressman for New York. What about New York issues?”

And look, obviously—obviously—one thing that Jonah and I will always do, and this is actually really important, is acknowledge that we have biases. There are very clear biases in the way that we grew up. There are clear biases in what we think. Obviously, we're both Jewish. We grew up in a pro-Israel environment—well, Jonah actually did not grow up in a pro-Israel environment. He just came to it later. I did.

I know my bias. I understand it. I'm not here pretending like I don't have it. But I had a conversation, and I really don't feel the need to talk about that specifically with you guys, the listeners, because I don't think it's important, and I don't think we're going to change minds. My goal is to provide you with what I view as reasonable information so that you guys can make decisions in the markets and try to be as unbiased as possible. This is not going to happen, right? Going down this path, I know that I'm not thinking about this in a clear, unbiased way.

So, I'm not going to preach to the choir about that. But what does bother me is socialism and communism and redistribution, and the idea that if you stifle the rich's ability—or the capital class's ability—to invest, and you take money from them and tax them, that's somehow going to make everybody better. That's just wrong, and it's been wrong for 100 years. It's been wrong for 1,000 years, and it's going to continue to be wrong for the next 1,000 years.

The best way to get a microwave, and the best way to get a car in every driveway, is to allow innovation to flourish. That is what America is built on. There's an incredible book called The Empire of Wealth, which I have right here, by John Steele Gordon, and it details exactly how America managed to become the wealthiest and most successful country on the planet.

This guy is actually not really right-wing or left-wing. He's just a historian. In fact, I would classify him probably as more left-wing than right-wing. But if you read the history, what you realize is that America allowed people to come and exist in a framework where they knew that the government was not going to interfere with their day-to-day life, and that their communities were the most important thing.

What that engendered was a culture of celebratory success. If somebody next to you is successful, you cheer for them. That's a very beautiful and powerful thing.

What I see right now with a lot of what's happening in New York politics specifically is that people disagree very heavily on taxes. They disagree very heavily on some social issues. They disagree heavily on how you should treat the rich. But the unifying issue is Palestine.

People all come under the same roof and say, “Okay, well, yeah, what Israel is doing is bad, and we're going to band together and use Palestine.” Whether you agree with it or not is irrelevant. Whether you agree with my take or I agree with your take is irrelevant. What is objectively happening is that they're using it as a wedge issue to shoehorn in communism.

All of these people are out there saying, “Free Palestine,” and everyone gets under that banner. Then they don't realize what's actually happening, which is that nothing's going to change for Palestine because you elected a congressman from New York. What's going to happen is that more communist policies are going to be passed in the city, right? That's the danger. That's what I'm worried about.

Forget whether you're a Zionist or an anti-Zionist, or you're this or you're that. If you want a better world, you should probably make sure that you don't vote in people who are trying to tear it down.

Yeah.

That's my political rant.

I mean, it's a markets rant as well. It's important to make the distinction here. The things you can set and forget are the positions that will be fine until there's a socialist wave. I thought that possibility was very far off, but now it's a clear and present danger with the 2028 presidential election, because the Democratic Party—Hillary Clinton and Barack Obama—seem like real centrists compared with the new wave of Democrats who are freakishly extreme to the left.

That matters for your assets. That matters for your real estate decisions. That matters for your job decisions. Basically, this is all about capital flows.

So, there are 2 threads that we've talked about so far in this podcast. The first is allocating to what the hyperscalers are spending on and shorting what the hyperscalers are selling, which is their stock and their corporate debt to fund their purchases. Sell their stock, sell their corporate debt, and buy what they're buying, which is data center assets.

Now, just a quick asterisk on that: it's not as simple as, “Data centers consume optoelectronics and electricity, so let me buy natural gas utilities and optoelectronics companies.” It's a little more nuanced and fundamental than that, so tread lightly when you try to buy what the hyperscalers are buying.

Again, you're not going to get your hands on physical high-bandwidth memory chips and then resell them to data center companies at higher prices, which is what they're actually buying. If you're buying Micron stock as a proxy for high-bandwidth memory, the thing has rallied a lot, and it's super volatile.

Google, Microsoft, and Meta are not buying Micron's stock. They're buying Micron's products. So be careful there.

But another capital-flows issue is, of course, what happens if socialism takes over? What if these elections in New York were the canary in the coal mine for broader national elections? Let's say dissatisfaction with Donald Trump or what he's doing on the foreign-policy side leads to a blue wave in 2028, where the Senate, the House of Representatives, and the executive branch are all controlled by the sort of neo-Democrat, the sort of left-winger 2.0—a Mamdani-type person touting communism.

What does that mean? That means that assets currently flow to where a lot of wealth is being generated right now. That's obviously bothersome to people who aren't getting a piece of it. But instead of that wealth going to people who mostly earned it, you look at today's entrepreneurs—hats off to Elon Musk.

Mostly. Mostly. But I do think that there is—

There's rent around the edges of any economy. But for the most part, that happens.

That it's just the stock market going up is also a huge portion of the wealth that's being created. I mean, if you look at—

But hear me out. Hear me out.

Yeah, I'm sorry. Sorry. Sorry. Sorry. Sorry.

It's like right now, capitalism tends to allocate in a quasi-meritocratic way to people who have built stuff, or people who have invested intelligently, or have a good process at something.

In socialism—capitalism, sorry—there are still people living in big palaces in the Soviet Union and people living like kings. It's just that those people have been the winners of a different type of system.

Usually, like, if a highly recommended book is The Oligarchs, another highly recommended book to understand socialism is Putin's People. In socialism, the way that you get ahead, the way that you amass wealth and power, is either by being a very good politician, which is not necessarily meritocratic. A lot of times it's backstabby, and politics is different from business. That's just a known fact.

Another way is that you can be a good gangster. That works really well in socialist systems—a sort of kleptocratic gangster. And then the third way is that you can become an oligarch.

These are, again, entrepreneurial people who find ways to extract natural-resource wealth, for the most part, but also other types of businesses. I dated the daughter of one of these guys 12 years ago. Her dad basically had a monopoly on the buns—the bread that went into the Soviet equivalent of Burger King nationwide. He got that contract through cronyism.

Who are we in the West to throw shade on an Eastern or non-Western style of business? But it's anticapitalistic, right?

Basically, it's just in the same vein as “sell what the hyperscalers are selling, buy what the hyperscalers are buying.” If socialism starts to creep into the American economy, sell what the socialists are going to redistribute and buy into whatever monopolies they're going to create in the name of equity and the utopian common good.

I certainly hope it doesn't happen.

I'm in Israel right now. Why don't you start the stream with that?

Yeah, I probably should have.

It's a pretty awesome society, but it would be necessary for me to tell the IRGC to send a drone there. Kempinski.

That's what I thought myself.

Basically, when you have a bunch of missiles pointed at your country, it sort of forces the type of meritocratic capitalist system that breeds success, and not some weird communist five-year-plan type of thing that Mamdani's proposing.

Socialism is very much a thing that happens. It's like a victim of your own success, or a victim of extreme persecution kind of outcome. Capitalism tends to be what people revert to when they need the best possible outcome for survival's sake.

Yeah. No, I 100% agree with all that, but I do think that what's happening right now was predicted, sort of, by Francis Fukuyama. People always say, “Oh, well, he was wrong—like, the end of history was wrong.” And that's because they've never read the book. Basically, what he actually says is that once we've solved the idea of liberal governance and figured out what the “best system” is, if life is too good, people will find struggle anywhere. And they'll find struggle against themselves.

That's really what's happening right now: people are struggling against themselves. That's why we get so much emphasis on Palestine. That's why we get so much emphasis on things that people are not necessarily actually part of. That's why, when you go look at the videos of the watch parties of all the socialists, they're all transplants from Ohio who are displacing the real working-class people. They're trying to find a struggle for themselves, right?

And that's what it is. It's a piece of identity that they're missing: Who am I? What am I? How do I become a good person? All of that channels itself into socialism right now.

6. Bitcoin's Cooked: Stay Short The Complex

But I think we've talked a lot about that. What I do want to talk about is the markets. We started by talking about what was happening with biotech, and that's been great. Basically, ARKG is up 8% since our show last week, which is great. The Nasdaq came off a ton, but what people are really looking at right now, at least in our comments, and what people are really worried about, is crypto.

I do want to address that for a second. Guys, we've been saying this for a while, but Bitcoin's cooked. Bitcoin's cooked, Ethereum's cooked. Everything that doesn't make revenue right now is cooked. As long as there's a trade with higher vol that's more interesting than crypto, you just can't buy Bitcoin. And that's AI right now. Those are memory stocks. SanDisk can go up 40% in a few days. Nobody's buying Bitcoin.

Not only that, STRC is depegging. The reason it's depegging is that, basically, the way it works is, in order to pay the dividend, you need to do really 1 of 3 things. You can sell STRC itself to raise money, you can sell MSTR to raise money, or you can sell Bitcoin to raise money and pay out the dividend. So Saylor really doesn't want to pause the dividend, because obviously that would kind of nuke the product itself, right? The whole point of the product is that it pays you a consistent dividend.

He can't sell Bitcoin right now, because if he keeps selling Bitcoin, Bitcoin's going to collapse in on itself, and that's going to be really bad. He's running out of options, you know, and MSTR basically has to sell. It has to keep selling it. But if he keeps selling MSTR, what's going to happen is obviously that the stock price is going to go down. So he's stuck.

Maybe he needs to sell STRC. That is obviously going to drive the price down, because people don't really believe that he's going to be able to continuously sell these equity products to raise money to pay the dividend. At some point, what's going to end up happening is he's going to pause the dividend, which obviously is going to make STRC kind of a useless product. And that's what the depeg is about: What is the probability that this guy is just going to fully pause the dividend? Also, that's just like—Saylor designed it with ChatGPT. I mean, he's cooked from that perspective.

Say what?

So my take is just short—stay short the crypto complex. But have a list of assets that you would buy lower. You've got to look at everything we've talked about that makes money. This is how crypto works: when you get into trouble, when the market falls apart, you sit and wait, and then you accumulate. That's how you win. That's how you get really, really, really easy 2–3xs. The best part about the crypto market is that people are so bipolar about it. They either hate it or they love it.

And when they hate it, at some point they're going to love it again. So you just have to buy when things start going sideways. Wait for the crash, wait for the collapse, buy CARDS under $0.10, buy HYPE under $0.45, maybe $0.40 if we get there. You just have to wait, basically, for these things to be forgotten about and get back in the market. That's really my take with the crypto markets.

And actually, right now—whoa, look at this. Guys, Bitcoin just broke $60,000. We're probably heading down to the $50,000s. I shared a short trade a few weeks ago on this. Basically, what I said was, look, once you reenter a range—let's see if I can share my screen here so that you understand what I'm talking about. Share screen. Here. Can you guys see this? Get rid of that.

I mean, here you go. Look. When you trade in a range, we can even go to the weekly here. If you trade in a range for an extended period of time, which is what you did here, from February 2 all the way to March 23. If you're on audio, what I'm doing is I'm just looking at the weekly Bitcoin chart here, which you can pull up and take a look at from February 2 all the way to April 6. You trade in a range, you break out of that range, and then you reenter and retest the bottom of the range. This is a phenomenal short.

I was talking about the setup when we were trading at around $65,000. I said you basically wanted to short here and just ride it down. My target here is going to be anywhere from $49,000 to $53,000. So you can still short here. Obviously, the trade's a lot worse. You probably want to short something like Worldcoin instead, which is actually oddly near the highs of recent weeks. This is for sure going down, probably to the lows.

Fartcoin is quite literally going to zero. Solana is fully cooked as well. You could probably see $46—I mean, that nice 50% drawdown. Zcash also, I'm probably buying it around $280.

And then the best-looking chart I've seen in a long time is ARKG. This is why you've got to just ape now. This is the Druckenmiller approach: You buy a little bit to force yourself to do research, and then you actually do the research. I'm still in the middle of the research, but that's just a good-looking chart. This is the base. I mean, we based for freaking 5 years now—4 years. We're going to break out. That's going to be good.

That's what I want to throw out there. What people might want to think about doing is, if you're really scared to just short crypto, you can buy HOOD and short crypto, because I think there's an asymmetry there: If crypto does well, HOOD does extremely well, but HOOD can still do well even if crypto does poorly, at least relative to crypto. And the reason is because they're really expanding the revenues outside. Those are some of my favorite trades for the next few weeks.

And this is really important, I think, to understand: If you're an investor, if you're a trader, the most important thing you can do is just make sure that, if you have a thesis, if you actually think about a trade, you get to a yes or a no, or you get to where you would be a yes or no. What do I mean by that? If you think to yourself, “Okay, I think that CARDS is going to do really well,” or “I think that HYPE is going to do really well,” but you don't want to buy it here, set your alerts and really get into that trade when it gets to the price that you think is good.

One of the things that often happens is you say to yourself, “I want to go buy CARDS below $0.10.” Then you get below $0.10, and you go, “Ah, I don't know. It looks bad. It looks really terrible.” Don't change your mind. Some of the best trades I've ever taken are just where it looks the worst, but I've had that target 6 months out, and we hit the target, and then we rip it, and that's just a phenomenal trade. From a process standpoint, what you want to do is make sure that you're following through on the lessons and trades that you've put together even 3 or 4 months ago. So I'm waiting right now.

Yeah, I mean, I'm not a technical-analysis guy, but, man, that chart you showed of Bitcoin, the weekly chart—boy, does that look like a flaming pile of elephant shit. I haven't seen it look that bad.

A whole flaming pile of elephant shit.

Now, I think the issue with Bitcoin—I'm as guilty as the next guy of being bullish on the highs at $124,000, but I lightened up on the way down. I'm glad I did. I'm certainly not rebuying, even though I still have my $1 million price target. I think the next trough of Bitcoin is going to be probably the best trade of my lifetime.

The previous most amazing trade I've ever done, probably, was buying GBTC in December 2022 and January 2023, just after FTX blew up, when GBTC was trading at a huge discount, even though, unlike MSTR, there's sort of no bankruptcy risk.

I think Bitcoin on a Saylor blow-up, which feels inevitable at this point because you said he designed it with ChatGPT. I think he designed it with a couple of friends over a table of God knows what at 3:00 in the morning. This is poorly thought through: “We’re going to buy Bitcoin with more money than we have, pay dividends to equity holders, take money from bondholders and give it to equity holders, and also sell our Bitcoin when we run out of money. But Bitcoin’s going to go up forever.”

We’re going to accumulate 5% of the supply until nobody else can match our size, and then become the Eggman. What is it? What is the name of the Eggman? Yeah, it’s just the Eggman.

Which, by the way, that’s a very famous trading story.

It’s very poorly concocted financial engineering.

Not to say who, but somebody ripped it from me. I’m not going to say who.

Yeah. Come on, thread guy. But basically, I was always wondering when, and the time is now, right? He’s going to blow up. When he finishes blowing up, the story for Bitcoin will never have been better in terms of the long-term value proposition.

The regulatory framework for crypto will never have been better. The setup will be the best in history. The price will probably be maybe not COVID lows, but like FTX lows after he’s done just exploding spectacularly. That’s when I think Bitcoin can finally run and do its thing, and that will be an epic trade.

So, I think that’s coming. I just don’t want to jump the gun. The Bitcoin that I sold at higher levels and want to rebuy, I’m just waiting very patiently. I have all the time in the world. Nobody’s going to jump in front of the Bitcoin train right now. There are so many other shiny objects.

Also, if the broader market implodes, it’s not like Bitcoin is going to hedge you. It’s going to go down twice as fast as the Nasdaq. So, stay away, do your thing, and just monitor that situation.

7. Should You Actually Buy AI Biotech?

The other thing you mentioned, biotech stocks—here’s why I don’t like that. Take this with a grain of salt. Biology was always my weakest subject. I just don’t vibe with the mitoplasms, the chronoblasts, and the blastochronoplasms. It’s not my thing.

I don’t really understand how the body works, other than that I feel a little bit better when I drink a beer versus when I don’t. Biotech is a very complicated thing. In the spirit of the advice I received a long time ago, which has served me very well: you can’t succeed unless you know the fundamentals.

Unlike crypto, there are real fundamentals in biotech. If you have a PhD in biochemistry, you will have an edge analyzing biotech equities. The best VCs in biotech have those degrees. It’s really a fundamental thing.

Now, obviously, AI makes biotech more interesting. The thesis is kind of a meme-stock, meme-coin-type trade, so you can probably mess around with some biotech ETF the way that you would have messed around with Fartcoin or WIF a couple of years ago and get in and out for a quick buck. But I’m personally wary of dabbling too deeply in spaces where fundamentals matter and you have no edge.

We can all pretend they don’t matter, and maybe they don’t in the short run, but come on, guys. They freaking matter. I ran over people once I knew how to profitably trade oil fundamentals. Before I knew the fundamentals, I look back on that and I was adrift.

If your thesis is, “AI makes drug discovery easier, so biotech stocks up only, number go up,” right? What’s going to happen when number go down? Are you going to be like, “No, no, no. AI is still going to really help biotech, so I’m just going to hold this while I’m losing my shirt”?

Or are you going to wonder to yourself, “Hey, is there maybe something going on here? Maybe the FDA—something, something. Maybe there’s a molecule issue with the biggest holding in this ETF that I’m long that I’ll just never understand.” You just don’t have a good objective framework to cling to when you’re losing money.

So, here’s the takeaway for the listeners: if you’re buying biotech stocks because AI, ask yourself how you’ll feel if you’re down 50%. Know full well that ARKG, or whatever this stock thing is that you’re referring to, isn’t a meme coin where everybody else has the same information as you, which is that there is no information. This time, there are real fundamentals and real information. How will you feel?

I think that’s a brilliant question to ask not just about biotech, but about quite literally every trade that you ever take that you’re looking at holding for an extended period of time. If the price goes against you, are you adding to it? If the answer’s no, then do you really have conviction in what you’re doing?

I personally am very convicted in the idea that biotech is going to be radically changed and the entire industry will rerate because we’re going to be able to produce more drugs at a cheaper cost and serve more people. I’m not really in the single-stock-name game because I agree with you. There’s kind of no way for me to predict which single-name stocks are going to do well.

But as an ETF, if I buy XBI and I buy ARKG, I’m basically making the bet that the entire industry is going to rerate. That’s why I actually have mostly XBI, because it’s a much larger selection. It’s a wider piece of the biotech world. ARKG is obviously a bet on the higher-octane, higher-risk, higher-reward.

I own them in a 70%-30% ratio. I know that you’ve got to roll here soon, but we will be talking about this on Friday.

Jonah, what are your plans for Israel? What are you up to after this call? What are you getting done?

After this call, I have another call where I’m going to be hustling on one of my other side hustles that is not this podcast. That’s what every good person should do: have a job, a side hustle, and then a side-side hustle. So, this is a side-side-hustle call.

After this, I’m probably going to pass out on this couch here, not even make it upstairs at the end. I’m so jet-lagged. Honestly, jet lag is fine, but when you have jet-lagged children, they amplify the jet lag, because whenever you’re just getting back into your circadian rhythm, one of them goes and ends it.

So, that’s that. I’ll be struggling through the week, wandering around, eating and being merry, and getting back at it. Then Friday we’re in Jerusalem.

I was going to say, I’d like that.

We’re doing some sightseeing and checking out the Old City. Then it’s all good stuff.

No, go visit the Wall for me.

Thank you. Will do. I’ll say a prayer for you, Avi. I think Jerusalem is a worthwhile visit for anybody. It’s all good stuff there.

You know what? I will do that. I will say a prayer for all the subscribers at the Western Wall. Hashem should bless you all with tremendous success, financial returns, and protection from your enemies and yourself.

Basically, we’re going to do a little Euro summer in France for a couple of weeks.

Where are you going to be? I’m actually coming out on the 8th.

South of France, Cannes, where we were.

I'll be there on the 8th.

Really?

July, yeah.

Oh, dude, we’ve got to do a live pod.

We’re going to do a live pod in the South.

I’ll be your last pod.

Yeah, yeah.

Come over. I’ll do the audio setup.

All right, amazing.

In the garden or something.

All right, I’m excited.

This is great. Totally unexpected, but wonderfully serendipitous.

We just serendipitously figured this out on the podcast. Thank you.

This is great.

Jonah, this is awesome as always. We’ll catch up soon.

Thanks, man. Great seeing you. Talk to you guys later.